Henrik Torstensson's Weblog

Sifted reports that Swedish healthcare company Kry/Livi is now profitable on a country-level, i.e. before HQ and technology development costs. The EBITDA result for 2023 seems to have been ca -€30 million, an improvement of 70 %.

Like Klarna, Kry says that they’ve been able to drive efficiency using generative AI and shortened administrative time spent around visits with 30 %.

Interesting lecture at MIT by Morris Chang, founder of TSMC, which includes his thoughts about if Taiwan loses its leading position in chips manufacturing it won’t be to Europe or the US, but to Vietnam, India or Indonesia. We (Europe) are not ready to work in the required way.

In an interview with Swedish business daily Dagens Industri (also press release in English), Klarna CEO Sebastian Siemiatkowski says that AI will replace 700 customer service agents and save Klarna $40 million in 2024. As a comparison in Q3’23 Klarna made a quarterly profit of $13 million.

Kinnevik, a Swedish investment company, is selling its shares in telecom operator Tele2 to Iliad/Xavier Niel (one of Europe’s most successful telecoms and technology entrepreneurs).

This means that publicly-listed Kinnevik will have sold its main cash-generating company and will be holding a portfolio of earlier and later stage startups (that mainly are unprofitable but growing fast, quite similar to a venture capital fund) as well as ca €2 billion in cash.

Analysts and fund managers seem to be wanting a major return of capital via a special dividend or share buybacks (and the company seem to be indicating plans along those lines).

As Kinnevik’s is public, I think (not that anyone is asking) they should first use the cash to establish new businesses (including acquiring cash-generating technology growth companies) that generate a more steady cashflow than volatile exit proceeds, and then use whatever is left (if anything) for a smaller buyback as the company trades with a discount to NAV.

Bill Gurley and Brad Gerstner deliver an interesting and deep discussion on business aspects of AI, chips, Nvidia and more. Quickly becoming one of the best podcasts in the intersection of investing, business and technology.

Today, February 24th 2024, Berkshire Hathaway published its 2023 annual report, including the well-known Chairman’s Letter written by Warren Buffett.

Buffett, mostly, invests for the long-term in companies that don’t change. I.e. Coca Cola and American Express.

This is partly very different from venture capital, as capital is invested in companies that will change the market it operates in.

While venture capital funds and technology companies don’t generally have Berkshire Hathaway’s 50+ year view, even for great technology companies development can take a long time.

Case in point: Nvidia. Nvidia shares went up 2x between 2002 to 2016 ($10 billion to $20 billion). Which is not very good. But then they went up 100x between 2016 and 2024 ($20 billion to $2 trillion). Which is sensational and unique.

There are several ways to build a startup or invest in startups. For a founder or investor I think it is a big win to find the way that works for oneself, where one can be authentic, find enjoyment in the day-to-day work and adapt the work to one’s strengths.

That doesn’t mean that all of the rules should always be ignored (they are often rules for a reason), but one should understand them so one knows when to bend (or ignore) one of them.

DI Digital is reporting that Gothenburg-based Heart Aerospace will cut 70 staff as it reorganizes to better fit its plan for technology development. Heart Aerospace recently announced a $107 million Series B funding round.

According to The Information (Twitter link), Sequoia Capital has retracted its request to remove Michael Moritz as Chairman of the Board of Klarna and is in full support of Sebastian Siemiatkowski as CEO of Klarna. It also reports that Klarna is “swiftly approaching [an] IPO”.