♪ caroline: i am caroline hyde, this is the best of bloomberg technology. up a change in voter ship. , $10ll analyze u.s. rival billion deal to buy world pay. how the chinese titan jeannie stacks up against its rivals.

a speed bump for the electric car giant. sales just down a bit. digitale deal in the payment space this week. this comes after j.p. morgan also showed interest but ultimately backed away. the u.s. credit card processor hopes to gain -- bloomberg's editor at large is -- joinsnd has nearly us for reaction. >> this is a fascinating company. it is based in a suburb outside of cincinnati ohio. a spinoff from third bank which tells you -- what is really happening is the way this

business works, when you go into a store and you use your credit there are a number of steps that happened behind the scenes. with each of those steps, takes a different chunk. you get the verification from the merchant and then the movement of the money between the bank and then the verification at the merchant side. as you go through each of the steps, there is a little bit of money taken away. when the world movement of commerce has gone from visible sources to online, the company's services those is -- servicing those businesses advances as well. let's stop to a man who knows about the online purchases -- let's talk to a man who knows about the online

purchases. that is a big part of this story. of this global payment processing attitude area -- attitude. is very much part of that move. paymente the first processor in the u.k. in 1994. also have a very global presence in europe and in asia. -- which has been under attack against more online players. companies, the , which is very--

much playing on the same footprint- a global -- thatring a channel is been very important to us. interesting that this is the key move. what about other -- jpmorgan was looking in but perhaps backed away. >> there have been a number of acquisitions over the last few years. we have seen the traditional companies. one, they have more exposure to e-commerce. course, the deal today for nearly $10 million. what is at play here, too, that

is not forget the very specific action that amazon took and going after whole foods. shares dropped in that acquisition. used -- to process their payments. up 4%. the shares drop amazon says, where going to stick with our existing payment structure. space is quite a live here and you can see, with , but also the notion that the , e-commerce companies are already kingmakers. kingmaker -- caroline: amazon the kingmaker.

what about the companies you have in your portfolio? >> i think what we would like , thesese companies to do companies that can be standalone , because they have a very large separate and really do not need a banker to go all the way. much what we are focusing on. meanwhile, facebook could now be the next target for european antitrust -- cartel office is examining whether facebook takes advantage of its popularity.

discussed what is next for european regulators. >> privacy is a lot more important in europe, especially to regulators, there are a lot more bowls and regulations in that region than in the u.s.. this combines antitrust privacies into one charge. basically, they are saying that if you want to get on social network, facebook is probably your only choice in the western world. --t dominant data is here, thepair, -- fate commences. sometimes it seems as though the german antitrust law authorities

-- this investigation was announced back in march. >> at this point, what is happening, i think anything can go right now. your encouraging other companies to sue google. it is interesting to go after the privacy angle. right now, it is tough to say. this is actually a german antitrust law.

it might come -- >> i'm not sure that the monetary value declines. i do think one goal of the regulator is to signal. it signals to the rest of the market that there is a watchdog. that there is somebody that is paying attention. that there is somebody that is trying to preserve competition. i think a lot of it is signaling, and a lot of it is -- whether it is to billion, 3 billion, 20 billion, what it is to make a company start to care. the point that the industry and the sector know that small companies are trying to come up. do not give up. do not think that you cannot compete. caroline: talk to us about how the tech giants are interpreting

.r investing their fear do they feel --? or do they think that this is about competition? >> the facebook case in particular is a real, and the u.s. some people consider to be a real overstretch. taking an antitrust argument, which -- taking that and applying it is quite a large leap. weeke google side, last there was an error of resignation in the company. they do say they are considering an appeal. the comments they put out this time versus one year ago, were a lot less combative.

resignation, especially when it comes to pure antitrust cases. caroline: i want to get your thoughts as someone who is there. does this make you worry about your price target for these companies or not? >> not yet. last week we put a note out on google saying this is overreach. saying, ifke around you do not like the privacy rules, do not accept them. ultimately, what i am most interested in is, i will worry if we see -- if we are in a orition if we see a pattern

are going after -- and trying to change the way these companies do business. caroline: do you think this is an out and out? do you think the european regulators are completely overstepping the market? do you think there is any reason they should be trying to level these --? >> you could make the case that all of these companies have done something wrong at one point or another. what google has done is a lot worse. -- content and use it on their own. what i would like to see is what the u.s. response is an that would affect my ratings and

targets but as of now, i agreed that it is more signaling. now coming up, we will explore the bombing environment outside of silicon valley. raise $150 million. this is bloomberg. ♪

-- more thandon is $2.3 billion into the city's technology sector since last year's printed vote. -- brexit vote. -- is raising $150 million in its second round.

founder joined us to discuss the current landscape area -- landscape. -- brilliant example of technology. brexit,years into clearly there was some question. the question going forward was what kind of -- are you going to be able to find in london. portugalrst met -- in it -- job is to find

caroline: what are you focusing on with this second fund? would you see the opportunity line for you to make it stick? early.till very it takes 5, 7, 10 years to build a company. -- having a firm that -- from fashion to beauty, to feud, to weight gain, everything is changing. we're looking for the founders who are at the center of what

people want. what sort of level do you see it going in that now? these numbers keep getting bigger each time. >> we are not dogmatic. we want to back the best partners in the segment. caroline: how do you find those founders? we have our tools, we would use data, we will catch signals. these days you can track things. time, we are very data,- while we look at

we like to see passion, emotion between the consumer and the product. it is never black and white, it is always great. is it institutional money? is it global money? >> we are a startup in venture capital. two years ago when we launched our first fun, the bar was very high. understand venture business. people chose to back felix because they said that we were offering something different. caroline: there has been a slew of technology -- as the u.s. market continues to transform.

alibaba is out to compete with the likes of amazon and google. we will discuss that. this is bloomberg. ♪

in the u.s. activity is up 243% compared to 2016. globally, it is up 96%. this comes on the heels of blue pierre moscovici what does this mixed bag create for the remainder of the year? we asked analysts. >> it does give me encouragement. as we have seen with other types of things, we are more insulated

in increased valuations and decreases as well. when companies have gone public and listed, they have been through extra rigor because there has not been this enthusiasm that is unchecked like we see in the states. last year, even though numbers were down, we had offerings there were more resilient than listings in new york. i do think it bodes well. we are going to see a lot more coming from financial services. there will be other sectors as i was saying earlier. maybe not so much e-commerce, we will see other sectors coming into the market. caroline: your take from the slightly more meager blue apron? hass that shaken the rest of the ipo market? do they look across the pond and see how it's faring in germany?

maybe blue apron is a one-off? >> i am more pessimistic area i do agree that there are sectors like financial and software that are more conducive to ipos. at the same time, we are below where we were a couple of years ago. the industries that are hard, i think those are going to be facing greater scrutiny. what is going to be a test is when you look into it, are they going to go direct? is the game going to change? these are things we don't know yet. caroline: talk about the game changes. we saw snap change the game. that is another company that james analyzes. they cap all the power with the ceo. they are not raising a more money, just coming to the market.

what do you see from companies coming through? >> i think this next generation of companies that started with google when they came to market is and zuckerberg when he brought facebook, there is a huge appetite from the market for really solid tech companies that have fundamentals. people are willing to concede other measures for publicly listed companies in order to get value in the business. i don't know if spotify will put it off. dropbox will try to do something that gives them and it antigen or an incentive to list. we are seeing uber and other companies. otherwise, they will raise money on private markets. i think control is going to be a big thing. preservation of status, options,

preference rights. how much they might have to yield and disclosed in the listing, if they can stay within regulator rules whether they have to be as transparent, they may share social media without having to go through pages of disclosures. caroline: how hard does that make your job? you have to go through snap's listing. what do you see when you looking at the rules of the game changing? >> if i was in a private company, i would not what to go public. it's not easy. at the end of the day, i don't have to analyze companies that are private. i just need anecdotes and information flow in order to assess the public companies.

that comes from relationships and so forth did it doesn't really change my life all that much. caroline: are you looking for dropbox this year? are you looking at names it might be coming to the u.s. market? >> obviously, there could be some others. the one i am keeping my eye on the most is spotify. caroline: a new forecast says electric cars will outsell fuel powered vehicles by 2040. according to bloomberg, battery prices will plunge. the auto industry will be turned upside down. this will bring about economic turmoil for oil exporting countries companies. how tech firms are planning to combat sexual harassment.

we are live streaming on twitter. check us out at bloomberg tech tv. this is bloomberg.

♪ caroline: welcome back to the "best of bloomberg technology." i am caroline hyde in london. the competition in digital speaker assistance is getting more intense. alibaba has unveiled an echo-like device. fellow chinese internet giant tencent and samsung have each prepared to develop their own ai powered speakers. we spoke with mark gurman on the growing artificial intelligence entering -- intelligence landscape entering your home. >> only for the first trial, 1000 orders, i'm curious to see how high the price goes, or even if there will be more than 1000

people rushing to buy it. i am assuming there will be given how big alibaba's spread is across asia. this year, 2017, has become the year of the digital speaker. >> and everyone wants in. sampson wants in. tencent wants in. why are we seeing this drive? what do the companies want in their ecosystem? >> use saw amazon and google jump in last year with update to the echo line. lots of new alexa devices. like the tap, dot, and the new echo show has the screen and the echo look as well. it's more of a style guide for your wardrobe. apple, they announced the home pod for $350. you have players in china trying to jump in.

why do they want these? let's start with apple. the home pod takes advantage of apple music and siri and home kit and their home-based services and streaming services, where they are trying to make the bulk of the money in the future has hardware sales. it is important because people really want smart speaker's. you see the demand for alexa. you see the demand for amazon and google's home speaker products. if apple does not create their own, or if others don't create their own, people will buy amazon products. they might really like alexa, and say, maybe i should subscribe to prime music or video instead of apple music in itunes and buy an amazon fire tv instead of apple tv. we are starting to see this pace of people wanting to see those devices. if apple does not create their own and others do not create their own, they risk losing other product lines to other companies. caroline: let's go to vc tech. when you see this rush for ai, you say how driverless cars is

the hottest investment in the last four months, is ai a good investment? >> i think it has been a good area, but we have seen a lot of startups in that space. on the smart speaker side we have not really seen anyone. very few startups. we have not really seen anything going after that. in going after that. i'm a skeptic on the home smart speaker area, where we have not seen an ecosystem growing up after them. even as a user or the potential in aeven as a user or the potential investor in them, what what is the retention? is what is the engagement with and will those? you i have had one for six and you will months. you it is catching dust. francine: --

caroline: mine is a timer will you and you adding generally. >> exactly. i think the voice interface is a in little simplistic. what can it actually do? that is the reason why they have been adding a screen now. if you have a screen and the speaker, it is just an ipad to does not move. is i don't really understand it. a i believe voice is a complement to other things as an interface, but the simple voice interface and device in the home -- i am a bit skeptical. caroline: you go to the app developer conferences. are they not managing to entice that investors on board? >> fact is -- that is a very a very legendary good question, interesting and very their three boys interesting. apple's siri voice platform is not open to developers where one start up can make a speaker and has her own labor and device

and put siri on top of it and thought other unflavored to it. you an online other unflavored to it. microsoft and amazon have recently started offering their voice service to be used on other startup devices. an ordinary you see carmen ball and run carden out with a microsoft word on speaker in the you speaker in the and fall that runs microsoft's cortana and a bunch are using alexa. the boy and a it will take time to penetrate. the bigger story here is the services that go with these greenpoint voice-activated systems. it is what kind of using to you -- what kind of music do you are want to subscribe to? it's about keeping players to in the league of the their line customers, sticking them will together in his ecosystems. you will the last thing apple wants is for people to use an iphone and an alexa speaker and and windows a pc. the last thing amazon once is want for other people to use an and apple tv and an alexa you may want to speaker. they want to bulk up the on ecosystems and have everyone line on their own platforms in the near it across the across the different devices,

one and the speaker is just one component of that. caroline: that was mark gurman. stories of sexual harassment in the tech industry continue to come out. tech startups throughout silicon valley have been rocked by numerous sexual misconduct allegations, resulting in several resignations from tech investors. the latest one coming just this week from dave mcclure. as the industry's move to grapple, the question still remains on how they can enact change in the male-dominated sector. jenna sarah, who has written for the new york times, wrote about this topic in his column this week. and joined us with martin to mignon. >> it is so pervasive that there are studies that show that 60% of the women who were polled in women will said they had had a to deal was some form of and you sexual harassment.

will will will i would say that is pretty darn pervasive. is and will it has gone on for years years because the power imbalance between a venture capitalist who has money and a female founder who desperately needs money is immense. as powerful as the ceo and an land underling. you only way it is really only you will recently, especially after susan fowler wrote that i incredible blog post about her year at uber, which launched the all decline and fall of travis video kalanick, that women have started to come out and not talk in vague generalities, but use their names so they are on the to you and you their names so they are on the record and name are a the people who harass them. there has been an explosion over will you will you the last two and i weeks in silicon valley over this. jobs have been lost. there will be more explosions

aaron i be more explosions andthere will be more explosions because women are going to keep talking about this. women in medicaid more names will come out and more jobs will and more. will come out and more jobs will be lost. >> what i am fascinated with is whether this is something that is been talked about in europe much. will i have been in silicon valley for a few months, but it does not feel like perhaps we and does not feel like perhaps we will get exposure here like an silicon valley. am i wrong? that i willam i wrong? >> i'm afraid you are wrong. the imbalance that joe mentioned to the fact there are way more men than women in the vc industry in the tech industry as when you it is in europe as it and you is in the u.s. this issue of imbalance i'm afraid will be the same here as you well. and well. you caroline: you think, therefore, they are jobs that will need to be lost in europe and asia to start to see the harassment element start to come away, but also the discrimination in diversity? >> i think what has been

an happening in the past few a you as you long as happening in the past few weeks and months has been a call to arms for the behavior of industry. we will see a lot of behavior and very brave behavior from these women if they are to speak you and you up. the i think it has been a good priority of a illusion of a thing. you clearly, this has moved to do you the top of priority list, mean that all the certainly at 20 our firm, and i'm sure across the industry. at index we have four female investors as part of a 20-person investment team, which is not to terrible but we should do much better. in much better. we don't have female partners, and we which is not really a good thing. we really need to make it a top prioritywe really need to make it a top priority to expand the female professionals. we are taking that really seriously. caroline: joe, your piece is fascinating.

i urge viewers to go online and read it. it takes brave women to come out and take on the startups. we have seen it affect other inwe have seen it affect other industries and maybe we will start to see harassment decline, but do we see diversity pick up, as well? are we starting to see all of in this coming to change in silicon valley? >> in a weird way, the you harassment is an easy and will problem to solve because it is such an offense that if you make the consequence, you will lose your job and your reputation, people, men will stop doing it. will that is with other doing in a mean that what is industries show. what you industries show. and i gender bias, getting women on boards, getting more women single women in founders, that order will and you is much more difficult. than although i will say one of the reasons that all this has ball and becoming will the reasons that all this has been coming out now is because there is are a lot more women founders wanting than there were in the holiday past. in an driving there is an

early increasing number of women and regularly who want to get into technology. i think it is their frustration that is driving some of this -- some of these exposes and could lead to a change. caroline: coming up, analysts voice concern about the tesla will will will voice concern about the tesla model s and model x cars. what does the ceo have to show with the upcoming affordable

week. analysts have grown concern of and england in a the committee will reported deliveries flatlining in the second quarter. goldman sachs issued notes and saying the demand for the company's higher-priced model s sedan and model x might hit a plateau. we spoke with ashlee vance and asking how important the company's upcoming model 3 will

be for investors. ashlee: we can look at the s and x sales, but the model 3 is this make or break product for tesla. over the weekend, we heard from elon they will ship about 30 model 3's this month. the good news is the car is arriving much earlier than tesla products tend to arrive. it is almost on-time. the bad news, of course, they are talking about hand making 30 cars and this is definitely not mass production like we're used to seeing from other automakers. but over the next year to two years it is how the model 3 cells that will define tesla. if you are an investor, the only way the share price makes any sense is if the model 3 does well. caroline: when looking at the slight selloff we saw today in tesla share price, that seems to also be digesting those numbers we got late monday, prior to the u.s. holiday.

coming from model s and x sales. they did seem to disappoint. is there an issue that potentially that there is a plateau going on here? ashlee: tesla seemed to blame some of the lackluster sales on trouble getting a battery pack into production. this has been a concern that is haunting the company forever. how many rich people are there that can buy a car that starts at about $100,000 after you start equipping it with a few things? you look around silicon valley where i live, i'm amazed to see how many are out there. there are more wealthy people here than i ever imagined. the same in los angeles. you wonder how this plays out globally. maybe, finally, it is starting to stall a little bit. that is where they made much higher margins than it will make on the model 3. that is where the problem stalls out. caroline: will people rather go for a $30,000 car that has the

tesla finesse to it, or would they rather go for the model s and x? ashlee: i think the model three is a definite problem. you can buy into the story where you can still get this amazing gadget. elon has been pushing hard for people to realize the model x and s are luxury high-end vehicles. if that's what you're looking for, that is where you should go as those sales to keep going. -- you wants those sales to keep going. there is no question these early adopters and people into technology and want to get in to tesla, the model 3 will be the obvious way to go. it is not just any's down -- an eased down version of the model s.

it is a much lower in car but it will be tough to convince people of that. caroline: what will elon musk be doing to convince? he is a man that takes to twitter. that is his way of speaking to the masses. how will he try to negotiate these bumps in the road? will he go out fighting? you are the man who has written on him. ashlee: he is relentless about these things. part of it is the shine. the model x and s have become a status symbol of sorts. i think that will carry on. there will be people who just want to buy the best thing that tesla is selling. and elon will be out there having huge events for the model 3. we see him on twitter all the time talking about, yes, we have this car coming but let me tell you about the model s and model x. he is relentless about this stuff and he has a gift the other carmakers don't have which is his twitter account is immense free advertising and it's very powerful. caroline: do you think they can

push forward and meet these very lofty expectations that are currently being baked into the share price? ashlee: in my gut, no. tesla has struggled with manufacturing for years. if we know anything, the shipment numbers almost definitely will come in under what the company is having us think about. with the share price this can be -- cannot be based on a six-month thing, how many model 3 do they ship through the end of the year. it's a one-year, two-year story if the company can make these cars efficiently. make them at high quality. then let's have a story that gets very good. if they struggle over a long period of time, it is a huge issue. all the competitors are coming with electric cars. their quality is very high. every month that takes by is -- ticks by is tesla's disadvantage.

it is a two-year story we are looking at. caroline: elon remains the number one shareholder. he has more than 20% of the company. he has got skin in the game. do the investor base ever worry about the fact he has got so many other distractions looking at spacex one day? how much should they consider he can remain so focused? ashlee: i think people worry about this. if we have seen anything over time, it is the company seems to be getting better at delivering on all the things that you want -- delivering all these promises. caroline: coming up, amazon's deal to acquire whole foods is shaking up the ghost market. what will they pick up next? if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com, and on sirius xm.

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an amazon's acquisition of will disrupt next. he thinks amazon can encourage tash encroach -- encroach on the territory of restaurants and the entire prepared food and delivery market, doubling up on the grocery opportunity. he discussed his outlook. >> there is no way my thinking in our thinking is in line with what jeff bezos is thinking. he is probably several steps ahead. in thinking about that, work in the opportunities be, and thinking about how they can leverage on the whole foods infrastructure today. here are a couple of things we

know. the restaurant business is an $800 billion industry, which is bigger than the grocery market. digital penetration of digital food sales is over 20% in china versus 2% in the u.s. the margins are ripe for the taking. you put that together, we think we can be in a situation where amazon can leverage their data, their analytics, and predict the kind of preferences of each individual market, leverage the infrastructure of whole foods to act as a commissary, slash the margins to 0%, and then deliver potentially celebrity chef tie-in dishes at five dollars a pop for prime members. i think it could potentially open up a whole new array of food services beyond delivery and grocery. >> wow. you were just talking about as a seed investor perhaps not the time to be going into the food delivery companies, even though it might be the time to look at delivery or this ipo.

do you see this sort of potential for the restaurant chains themselves to be disrupted by technology delivery? >> absolutely. i agree with james. there are other categories that amazon might go into for brick-and-mortar stores. i don't think it will end with food. as james said, it's about the infrastructure and logistics and supply chains. there are other critical categories where amazon can go retail. as a seed investor, we do predominately tech. i am less of an idealist and less of the visionary than james and certainly jeff bezos, but i think about what amazon has done on the back end of everything. it is not just logistics for food products or otherwise, whatever they have done for storage, cloud updates. in the u.s., i think it was a lot more they can do even on the back end that will surprise more and more people. caroline: when you're looking at

amazon, give us what you see the potential in terms of price target, where you currently stand on the company, and a talk of the restaurant area and some of the other sectors that it could disrupt. james: we are neutral rated and not taking a position on the stock because of this regulatory overhang we talked about. theoretically you can easily make a case for the stock to move at least 50% higher from here based on where the numbers are. the margins are improving. the theoretical margins on the retail side as those businesses scale as well. you have the overhang, but as far as the next avenues they can pursue beyond just food, i think health care, personal-care products is ripe for the taking. potentially see an acquisition on that front. that is another massive industry. think about drugs and all the personal products you have partially being fulfilled on

amazon, but it can definitely be taken to a whole other level. caroline: i am typing in analyst recommendations and you see how many buy ratings remain on amazon and how many few sale ratings are and the price continues to escalate as we continue to see price target slightly continuing to go higher on the white line and where we see price targets show up on the bloomberg and the yellow line is tipping amazon slightly. we are certainly not seeing any sales from the analyst. do you have the regulatory, or do you think amazon will continue to become the -- >> given everything we were talking about earlier, they will be what the regulators are looking at. it is really obvious. i think they have so much

consumer data and transactual data, there is a lot of ripe fruit. they are starting to get into drone delivery and there are privacy issues. if the regulators are doing it to really try to take any battle to try to bring the company down a bit, there will be a lot of material there for them. caroline: finally, facebook, twitter and the parent of snapchat want to be able to show video clips from the world cup next year. the companies have offered 21st century fox tens of millions of dollars for the online rights. fox holds the u.s. broadcast rights for the world cup. that does it for this edition of "best of bloomberg technology" and all next week, we will have special programming on bloomberg tv, radio, and the web for tech week. tune into egg issues in tech right now. plus, it interviews with top industry leaders. all episodes of "best of

bloomberg technology" are now live streaming on twitter. check us out on weekdays. that is all from london. this is bloomberg. ♪

>> great intellect, great drive, great leadership? >> all of that. >> tiger woods, you can see coming from way back. and basketball, you had someone named michael jordan. a $400 million gift or $500 million gift, you actually write that check out russian mark --? >> i look at nike as my work of art. meple would not recognize