Moonshot Plans IPO in Six Months After China AI Breakthrough

Summary

Bloomberg Intelligence Podcast

Episode: Moonshot Plans IPO in Six Months After China AI Breakthrough
Date: July 20, 2026
Hosts: Paul Sweeney & Scarlet Fu

Episode Overview

This episode explores the surge of IPO activity in 2026, with a particular focus on the Chinese AI company Moonshot, which is preparing for a high-profile IPO following its Kimmy K3 model breakthrough. The conversation spans Moonshot’s rapid rise, the current AI landscape, trends in IPOs for both tech and consumer-facing sectors, risks and opportunities, and insights into Gen Z consumer behavior in beauty markets.

---

Key Discussion Points & Insights

1. IPO Boom in 2026

• Scarlett: Sets the stage with the observation that IPO activity is robust in 2026. Investment banks are showing strong pipelines and executing significant deals.
• Moonshot and Jersey Mike’s are highlighted as the next big deals.

---

2. Spotlight on Moonshot: China’s AI Breakthrough

[02:32-03:37]

• Moonshot’s Entry:

  • Billy Lipschultz: “Moonshot runs the Kimmy model… Kimmy K3 is the latest kind of model. Kimmy K3 is AI… they’re a Chinese company and they’re open source.”
  • The company rapidly gained international attention, “took the world by storm,” and is planning a Hong Kong IPO in six months with a $30 billion valuation.
  • Compares with previous moments of AI hype, like “that deep seq moment we had a few years back.”

• Deal Details:

  • Moonshot is working with China International Capital Corp. and Goldman Sachs.
  • They are closing a funding round at $30B, “relatively small potatoes compared to the anthropics and open eyes of the world,” but significant for an emergent player.

---

3. Private Equity Exits & Traditional Brands Going Public

[03:37-06:20]

• Jersey Mike’s IPO:

  • Blackstone is taking Jersey Mike’s public, aiming to sell up to $1.1B worth of shares—a move valued at ~$8B.
  • Noteworthy for its “quick turn, quick money” and as an example of a private equity deal fast-tracked to public markets.
  • Scarlett: “Their IRR is monstrous.” [05:20]
  • Blackstone bought Jersey Mike’s in January last year, brought in an experienced leadership team, and quickly optimized operations for IPO.
  • Investors draw comparisons to Cava and see international expansion potential.

• Private Equity Narrative:

  • Scarlett: “I was told… it’s really easy to invest money, it’s really hard to sell. To get a good exit.”
  • The success of Jersey Mike’s IPO is seen as validation for Blackstone’s exit strategy and critical for raising the next fund.

---

4. Upcoming and Rumored AI IPOs

[06:35-07:16]

• Anthropic: Beginning “testing the waters” meetings with top investors; IPO likely September–October 2026.
• OpenAI: Seen as a 2027 IPO candidate.
• Other consumer plays like Cumberland Farms are also in the pipeline.

---

5. The AI Model Race: Deep Seq, ChatGPT, Gemini, Claude

[10:04-14:48]

• Deep Seq AI:

  • Chinese AI chatbot launched in January 2025; known for ultra-low costs (“$0.02 for a basic intelligent task vs. $2.75 for competitors”).
  • Rapid initial adoption (170M downloads in 2025) but “downloads have subsequently declined this year.”
  • Geopolitical and national security concerns impact acceptance in western markets.

• Platform Usage Trends:

  • Market Analyst: “Total active users globally, ChatGPT is over 55%. Gemini is also, I would say, 45-50% very high. The other players… are significantly smaller.” [13:09]
  • Claude’s growing foothold in enterprise (70%+ of usage is web-based; B2B focus).

• Investor Risk Perspective:

  • Scarlett: “As an IPO investor… knowing that tomorrow there could be some kid who comes out of somewhere in the middle of the world. That’s kind of how it is out there.” [12:56]
  • The pace of improvement and fear of disruption keeps investors cautious.

---

6. AI Economics: Cost, Tokens, and the Energy Challenge

[14:11-14:48]

• Enterprise AI is expensive due to compute intensity and token-based pricing.
• Deep Seq presents a cost alternative, yet faces trust barriers.
• US companies are piloting Deep Seq but with reservations tied to data location and security.

---

7. Public Market Performance and SpaceX as a Litmus Test

[15:17-15:37]

• Scarlett: Discusses SpaceX’s volatile post-IPO share price ($135 → $200 → $123), highlighting how AI exposure isn’t always a guarantee of strong public market performance.

---

8. How the AI Revolution is Impacting Software & Marketing (Klaviyo Interview)

[18:08-23:03]

• Introduction to Klaviyo

  • Serbi Gupta (CTO): “Klaviyo is an autonomous B2C CRM… we bring marketing, customer service, analytics, AI, all under one umbrella and it’s all powered by data… we just launched Composer and Customer Agent to help with this.” [19:02]

• Customer Experience:

  • Serbi Gupta: “If you, as a customer, go and interact with any of these brands [e.g., Glossier, Away, Mattel, Tory Burch], you can get a very personalized experience. And… these brands work with Klaviyo and we help with powering each of these relationships.” [19:48]

• AI’s Role:

  • Klaviyo uses AI to increase marketing efficiency—“help marketers be the best they can be.”
  • Gupta: “AI is not only helping with what we build, but also how we build it… We see the velocity going up a lot.” [20:59]
  • AI has moved bottlenecks in software development, allowing for much faster feature releases.

• Customer Demand for AI:

  • Gupta: “Our customers are driven by growing their business… when we show them demos of the features… they want those features. We believe that AI and these models have really unlocked the ability to create a whole new set of features… and that’s what we’ve seen with Composer.” [22:07]

---

9. Gen Z Beauty Habits & Demand Trends

[25:33-29:13]

• Research Findings:

  • Lindsay Dutch (Senior Analyst): “Gen Z tends to have more intensive beauty routines. A lot more of them use a lot of product compared to average… Gen Z not only shows steady demand, but it actually seems to be improving, which is a pretty big contrast to what we’re seeing in the broader market.” [26:14]
  • Despite digital fluency, “about 75% of that cohort prefers to shop in store for beauty. They like to see the product, they like to test it out on their skin.” [27:24]
  • Social media is the top discovery channel for Gen Z; more important than discounts for triggering unplanned purchases.

• Fragrance Layering Trend:

  • Gen Z is fueling a boom in the fragrance market through “fragrance layering”—mixing multiple products to create personal scents.
  • Ulta is specifically targeting this trend with expanded offerings.

---

Notable Quotes & Memorable Moments

• On Moonshot’s Rapid Rise:
  Billy Lipschultz (02:35): “They moved markets on Friday… Moonshot runs the Kimmy model… and they’re a Chinese company and they’re open source.”

• On the Risk of Disruption in AI:
  Scarlett (12:56): “As an IPO investor, I’d be like, you want me to invest? Put all my eggs in your basket, knowing that tomorrow there could be some kid who comes out of somewhere in the middle of the world…”

• ChatGPT’s Dominance:
  Market Analyst (13:09): “Total active users globally, ChatGPT is over 55%… ChatGPT sort of become the Google word. Right.”

• Generational Shifts in Consumer Behavior:
  Lindsay Dutch (26:14): “Gen Z not only shows steady demand, but it actually seems to be improving, which is a pretty big contrast to what we’re seeing in the broader market…”

---

Key Timestamps

• [02:32] Moonshot IPO background and excitement
• [03:37] Details on Jersey Mike’s IPO, private equity strategies
• [06:42] Anthropic and OpenAI IPO timelines
• [10:04] Reference to Deep Seq and AI tool adoption
• [13:09] Market share stats for ChatGPT, Gemini, and Claude
• [18:08] Klaviyo CEO interview on AI-driven marketing
• [26:14] Gen Z beauty spending habits

---

Conclusion

The episode provides a compelling snapshot of the current investment landscape:

• The warp-speed trajectories of AI startups from breakthrough to IPO;
• How consumer and enterprise AI markets are consolidating around a few big players;
• The crucial role of cost, security, and access in global AI adoption;
• Private equity’s return-to-form through rapid exits;
• The importance of understanding younger consumers’ preferences, both for products and experiences.

The team’s in-depth analysis, timely statistics, and candid interviews make this episode especially valuable to investors following IPOs, tech innovation, and shifting consumer markets in 2026.

Transcript

[Scarlett]

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[Market Analyst]

Where do you think the disconnect is happening?

[Scarlett]

There's this huge differences that exist in terms of what advisors think they're talking about their clients, what clients are actually hearing.

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[Podcast Host]

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[Scarlett]

Lots of IPOs. That's certainly been the score for much of 2026. And we said the big investment banks reported earnings last week and they were touting how much their the deals they're getting done and how good their pipeline looks. And we got more still coming here that's keeping our next guest very busy. Billy Lipschultz, senior equities reporter for Bloomberg News. Moonshot I oh boy, I'm afraid to ask. What is this thing and when is it coming?

[Billy Lipschultz]

You haven't heard of Moonshot?

[Scarlett]

No, I have not.

[Billy Lipschultz]

You are not what really? Really. Oh, my gosh. I mean, they moved markets on Friday. They're the reason that Friday I was on that beach. Oh, you look like you got some sun. Okay. Moonshot. Moonshot runs the Kimmy model. Kimmy K3, the latest kind of model. Kimmy K3 is a AI.

[Scarlett]

I have to put that on my phone now next to Claude.

[Billy Lipschultz]

And they're a Chinese company and they're open source, so I think I know your answer there. But. So this is a company that really burst on the scene while you were on a beach enjoying the nice weather that really kind of caught. Took the world by storm, I guess you could say. And very quickly, Bloomberg is reporting they are now eyeing a Hong Kong IPO in the next six months. So that would be a quick turnaround. Company is, according to our reporting, working to close a 30 funding round at $30 billion valuation. So relatively small potatoes compared to the anthropics and open eyes of the world. But it is pretty interesting just given how quickly the company again became for some a household name overnight, similar to that deep seq moment we had a few years back.

[Bloomberg Intelligence Analyst]

Yeah. And trying to capitalize on that, that excitement. It's a Beijing based startup. It's held talks with China International Capital Corp. And Goldman Sachs about working on an. The one part of the deals market that's been kind of sluggish is exits from private equity and, you know, exiting their investments and listing them on the public markets. Jersey Mike's is kind of in defiance of that if it actually does go through with an ipo.

[Podcast Host]

Yeah.

[Billy Lipschultz]

And we've seen actually Blackstone try to live up to their promises from Jonathan Gray that this was going to be the year of an ipo. Of the ipo. They did take out Blackstone Digital, which is kind of an AI data center roll up firm, and they also took out Liftoff, which is in the app space. But Jersey Mike's more of a household name. I think you've been to one of those.

[Scarlett]

Yes.

[Billy Lipschultz]

Okay. So you know, Jersey Mike's, the company and their backers, including Blackstone, looking to sell up to $1.1 billion in this IPO, would value the company at about $8 billion. So that is kind of a big valuation relative to most kind of growing casual chains, if you will. The big pitch, at least when I talk to investors, is they look at the success from Cava, they look at Jersey Mike's, Jersey Mike's Blackstone asset. But they brought in the leadership team from Wingstop. So you have seasoned vets running the show you have Blackstone, which is going to make a decent amount of money on this ipo. And then you also have the international pitch. They partnered with the Jersey Mike's founder to help lead an expansion in the uk. So fast growing, pretty darn good franchise model here in the us. International ambitions and private equity sponsor is

[Scarlett]

what kind of blackrock own this for about a cup of coffee. Let's be honest. When they bought this just a few

[Billy Lipschultz]

years ago, Blackstone closed the deal in January of last year. Yes. So in terms of the turn, one and a half years fast.

[Scarlett]

Awesome for them, I mean, and their irr. I'll go do the math on the train ride home, but I'm going to guess our IRR is monstrous.

[Billy Lipschultz]

Yeah, it's a big return and it's a big, again, a quick return in a. In a time when people, to Scarlett's point, private equity hasn't been super active in getting these exits. The interesting thing is you step back when that deal was announced back in November of 2024, and consumer bankers were like, this is a company that could have gone public then. So then you bring in Blackstone, they do a little bit of private equity magic, but again, they bring in an experienced management team, get the operations where they want it in a quick turn, quick money. And at least when I talk to folks on the buy side, they like it.

[Scarlett]

And that is super important when they go out to raise the next fund, which is when I was looking at private equity maybe 20 years ago, I was told, pretty easy to raise money, it's really easy to invest money, it's really hard to sell.

[Serbi Gupta]

Right.

[Scarlett]

To get a good exit. And so the way you get raised money is to say, hey, I'm generating returns, I'm getting exits, successful exits, and

[Billy Lipschultz]

they happen to be, I mean, Blackstone obviously is huge, but you're not overexposed to software. Which is a good timing because you talk to some of the folks at the Thoma Bravos of the world and it's like, okay, well, you're super bullish on software. This is the opposite time.

[Bloomberg Intelligence Analyst]

Totally different narrative. Right. Very quickly, Billy, is there anything new with Anthropic or Open Air going public this week?

[Billy Lipschultz]

Anthropic is meeting with some of the largest, long only investors. We put that out at the end of last week. So that'll be the formal starting to my understanding of testing the waters meetings, talking about what the size could look like, what the company looks like. Again, a lot of these funds own it. So they're meeting with Dario and team that they know. But the big thing is this seems to be indicating that that September October time frame is in play. Whereas OpenAI for all intents and purposes is very much seen as a 2027 story.

[Scarlett]

And are we expecting activity to once every get back from vacation, September kick back in? Is that kind of.

[Billy Lipschultz]

Yeah, we got, we get a little burst with Jersey Mike's people expect Cumberland Farms.

[Scarlett]

Cumberland Farms. Yeah, they grew up with Cumberland.

[Billy Lipschultz]

Yeah. Group. Yeah. That's a, that'll be another big one.

[Scarlett]

It's a, that's a competitor to Wawa John. So I mean it's a Cumberland Farms person.

[Billy Lipschultz]

You're a person.

[Scarlett]

I don't know how Cumberland Farms is now. I'm not going to characterize it as get in trouble, but I've never been there.

[Bloomberg Intelligence Analyst]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Scarlett]

Over $100 trillion estimated to be transferred to generations in the next 25 years. It's both a risk and an opportunity because we see that only about 18 19% of high net worth investors plan on sticking with their advisor post transfer.

[Bloomberg Intelligence Analyst]

This has to be a tough statistic

[Market Analyst]

for some to hear.

[Bloomberg Intelligence Analyst]

People who work so hard trying to grow their net assets, they want to

[Market Analyst]

protect that life work and they want

[Bloomberg Intelligence Analyst]

to make sure that it is able to transfer in a seamless way.

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[Scarlett]

Support for this show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk. Monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors LLC. SEC registered advisor complete disclosures [e-mail] disclosures

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you're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomb Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Scarlett]

We heard another company, you know, IPO Deep, seek us that deep sea because that rocked the AI world, I don't know a year ago because it came out with a pretty good AI product at a much lower cost. Deep seat.

[Market Analyst]

Yes. So In January of 2025, Deep Seq came out the Chinese owned Chinese based AI chatbot and basically ramped up on downloads. About 170 million downloads in 2025 alone is, as you mentioned, significantly cheaper for many of the tasks that people ask it to do. So one study I read that for a basic intelligent task it would cost $0.02 versus $2.75 for some of the other models. So just to put that into perspective, but what has happened since then is that downloads have subsequently declined this year and year to date it's only been downloaded 34 million times and only 2 million times within the US so there could be a number of reasons for that. One might be the fear of, you know, security. The servers are based in China, so there might be questions about national security and the security of the information if people use it. So that's one of the options as well as other products such as chat, GPT and Claude ramping up their features and functionality.

[Scarlett]

So it seems like on these AI tools here, whether it's a cloud or a Gemini, they iterate so often, right?

[Market Analyst]

Yes, yes.

[Scarlett]

And they make material jumps in quality and capabilities. How do you guys track that? How do you guys track like who are the big ones, who are the good ones? How do you guys do that?

[Market Analyst]

So based on our data, we have a proprietary first party panel, so we keep track of every time an app is downloaded, every time someone opens an app, how long they spend on the app, the number of sessions. Similarly, we also have website data where we also track when they go on these sites as well as we started keeping track of the percentage of ads that are seen by chat GPT users. So we also have advertising data. So we have a wide breadth of different data sets that we look at and combine to figure out what we think is happening in the space. And so we don't keep as much of to figure out if, you know, version one is better than version three. It's just more about are they getting more engagement, are they getting more users and what's driving those changes?

[Scarlett]

I think most tech companies, in my experience, they have this fear in the back of their minds that a couple of kids in some garage in Palo Alto are a day away from putting me out of business, coming up with something better. Mousetrap. I know we feel that way here at Bloomberg. And that's kind of what drives you forward to continue to innovate in this space. It really seems like it, because it feels like we're on the wild west of this. We don't know where this technology is coming from. At least I don't. It's coming from everywhere.

[Market Analyst]

Yes.

[Scarlett]

And it's going at such a rapid pace. As an IPO investor, I'd be like, you want me to invest? Put all my eggs in your basket, knowing that tomorrow there could be some kid who comes out of somewhere in the middle of the world. That's kind of how it is out there.

[Market Analyst]

It seems like it is, but there are definitely leaders in the space. So when you look at total active users globally, Chachi beat is over 55%. Gemini is also, I would say 45 to 50% very high. The other players, while they are growing, are significantly smaller. And the way you know, Gemini has a lot of advantages. It's in your Android operating system. They can connect to Gemini without going to the app. So it's probably even understated versus the active users that we show ChatGPT sort of the first mover advantage, first app to reach a billion MAUs in the shortest amount of time. ChatGPT sort of become the Google Word. Right. And so when you think about B2C customers, I think a lot of people first start out using ChatGPT and for an average user, they probably don't see much difference between any of them. Whereas Claude has rapidly grown and it seems to be more focused on enterprise. 70% of their users time spent is on the web. Right. So maybe you get a split versus B2B and B2C. But while the other players are growing, they are very small.

[Scarlett]

And isn't the cost of it. If I want to an enterprise and have Claude used by my employees, I got to pay for that, right?

[Market Analyst]

Yes. You get tokens. So when you ask a task or when you have a task, it requires some sort of payment in the token. And then also in the back end of this is a lot of energy to do these calculation. So it's an expensive endeavor and that is the benefit that Deep Sea CAS is that it is much cheaper and there are US companies testing it again because of national security and whatnot. I mean you're allowed to use it here, but we'll see how well it's adopted in certain western countries.

[Scarlett]

So just in terms of the timing of potential IPOs, I guess anthropic is the first one we think we might see.

[Market Analyst]

They they have mentioned it that Anthropic owns Cloud open AI for ChatGPT and now Deep Seek said maybe early 2027. I think a lot depends on how the market goes, how we see Space X perform just given its exposure to AI and grok. So yeah, I think that will be market dependent but I think they certainly would all like to go.

[Scarlett]

Absolutely. I'm looking at space exploration Space X. Kind of a quasi AI play to say the least. That's certainly what they pitched. Yeah, I don't know when public at 135 bucks went over 200. We're now back down, we're 123. So we're below the IPO price and below the first print at 150. So I'll see how that plays out. See Michelle Vice President.

[Bloomberg Intelligence Analyst]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Scarlett]

Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on Public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent and not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, LLC. SEC registered advisor complete disclosures [e-mail] disclosures Amazon Pharmacy presents Painful Thoughts of course I see my co worker in line at the pharmacy. Can he tell I'm picking up prescription hemorrhoid cream. I'm probably standing.

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[Scarlett]

We're at the stage of this story in the marketplace where the market is definitely trying to find winners and losers. And one of the areas that the market is concerned about is software. Certain areas of software, particularly software as a service. And that includes the next company here. The company is called Klaviyo and the symbol is K V Y O. The stock is down about 45% year to date. It's a customer relationship management company using technology there think something akin to salesforce.com we want to get the latest on how AI is impacting this company, this part of the software space. And we're pleased to welcome Serbi Gupta, chief technology officer. And the company's name is Klaviyo. Again, K V Y O is the ticker surby. Thanks so much for joining us here. Talk to us about kind of what you guys do at Klaviyo and how you're integrating AI into your business.

[Serbi Gupta]

Yeah, thanks for having me. So Klaviyo is an autonomous B2C CRM and we bring marketing, customer service, analytics, AI, all under one umbrella and it's all powered by a data and we are building products and features to help our marketers be the best they can be. And we actually just launched composer and customer agent to help with this.

[Bloomberg Intelligence Analyst]

Okay, so let's bring it down to how a consumer might interact interface with your technology, with your products, your B2C platform, which means business to consumer. So the consumer does have some exposure. How Paul, when he is, you know, Buying something online. Experience your work.

[Serbi Gupta]

So we have 200,000 customers, and let's say there's glossier away. Mattel, Tory Burch. If you, as a, as a customer go and interact with any of these brands, you can get a very personalized experience. And the way you do this is because these brands work with Klaviyo and we help with powering each of these relationships.

[Scarlett]

Is AI a friend or an enemy to you and your company and your software?

[Serbi Gupta]

Oh, we're all into AI. There's a lot that we're using AI for, even if we just take our Composer product, it's your marketer's right hand. The goal is to help you be as effective as you can. You have all these ideas of things that you want to build and experiences that you want to create, and we want to make that much easier for you. And AI is at the forefront of helping make this a reality.

[Bloomberg Intelligence Analyst]

So talk a little bit about consumer behavior and how that enables the use the application of a lot of the AI tools that you are developing.

[Serbi Gupta]

So one thing that's really exciting about this wave is that AI is not only helping with what we build, but also how we build it. When we think of what we build, we're able to build out these experiences much faster and we're able to get out more ideas in the hands of our customers. I look at the entire build process as significantly changing. We see the velocity going up a lot. We see that our engineers are able to ship these features and much faster. Now, you might say that, hey, like, software engineering, writing code has become so much easier. But, you know, there's so many other parts of the software development life cycle that we see that the bottlenecks move to, and we're working through all of those. And AI is helping us with massive velocity increases.

[Scarlett]

Are your customers, are they saying, hey, we need more AI in our, more AI capabilities, in our marketing promotion campaigns? Are they pulling that from you or are you more pushing that to them?

[Serbi Gupta]

Our customers are driven by growing their business. They want to help grow their brands. They want to help reach their customers much better. And that's what we are focused on. And when we create these products, when we show them demos of the features that we've built, they want those features. So the end goal for us is not that, hey, we're going to use AI in this way and convince you why it's important. We are going to build the best products that we can. And we believe that AI and these models have really unlocked the ability to create a whole new set of features that we can put in their hands and that's what we've seen with Composer. We've put this in front of our customers. They've been using this to create their campaigns and flows and when it works its magic, we've taken away so much work from them and they can do the work that they're best at, which is coming up with really good ideas and we can help make that a reality.

[Bloomberg Intelligence Analyst]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Scarlett]

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[Bank of America Announcer]

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[Scarlett]

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[Bank of America Announcer]

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[Billy Lipschultz]

How is this $47?

[Scarlett]

All right, we're gonna need a plan here.

[Bank of America Announcer]

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[Scarlett]

Oh, that's actually really simple.

[Bank of America Announcer]

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[Podcast Host]

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Bloomberg Intelligence Analyst]

We talk a lot about this younger generation of consumers, Gen Z Z, and how their spending is very different than say Gen X or Boomers. They'd like to spend on experiences. I mean, they do buy some hardcore products. They're rediscovering things like landlines and Polaroid cameras. What does it look like when it comes to beauty products? What does it look like when it comes to that part of the consumer market? Let's bring in Lindsay Dutch. She is our BI senior industry analyst covering this sector and she joins us now. And Lindsey, you and your team put together some research, research on what Gen Z likes, what they don't like. What did you find?

[Lindsay Dutch]

Yeah, hi Scarlett, thanks for having me. We ran our semiannual beauty survey and we just got the results back. And in general, when you look at the market, it's $120 billion market in the U.S. demand is relatively soft for beauty. Kind of weakened a little bit over the past six to 12 months. It's sitting near lows, two year lows based on our series of surveys. But one thing that stood out was Gen Z, Gen Z tends to have more intensive beauty routines. A lot more of them use a lot of product compared to average on our survey and their demand signals that I look at, which is, you know, would you cut back on other things before beauty? You know, how important is continuing your beauty routine? Are you trying new products? When I look at those types of indicators, Gen Z not only shows steady demand, but it actually seems to be improving, which is a pretty big contrast to what we're seeing in the broader market.

[Scarlett]

So Gen Z, I mean, they're very, very comfortable with buying pretty much anything and everything online. How about beauty?

[Bloomberg Intelligence Analyst]

Yes.

[Lindsay Dutch]

So Gen Z does show a high interest of shopping in store. Our survey shows about 75% of that cohort prefers to shop in store for beauty. They like to see the product, they like to test it out on their skin, so they are interested in that. But they do use online for discovery. So social media is very big for beauty and discovering new product. You know, Gen Z, a lot of them do look there for inspiration. And one interesting fact, you know, I ask a question, question about, you know, what would inspire you to buy something that you were not shopping for. And Gen Z ranked seeing it on social media ahead of a discount on a certain product. More broader results were that, you know, a discounted product would spur them to make that purchase decision.

[Bloomberg Intelligence Analyst]

So within your research, you also find that Gen Z leans into fragrance. How do you discover fragrance online?

[Lindsay Dutch]

Yeah, fragrance discovery is hard online, but Gen Z is fueling sort of a pickup in the fragrance market. And with this trend called fragrance layering, which is basically buying a lot of different products for scent, you know, you can do lotion, you could do a spray and sort of they mix them all together to kind of create their own personal scent. This is driving demand in the industry and it's, and it's demand from mass brands all the way up to luxury. So it's something that we're seeing and the survey results really sort of validated that Ulta, who caters to the younger consumer, they're really looking to be a leader in fragrance, really expanding that assortment and trying to capture that demand.

[Podcast Host]

This is the Bloomberg Intelligence podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.

[Bloomberg Intelligence Analyst]

Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make healthcare work as one for everyone. Learn [e-mail] now more than ever, America needs a laugh.

[Scarlett]

Enter the Super Troopers to the rescue. Vermont's finest and most shockingly offensive mustachioed highway patrol officers return to the big screen in Super Troopers 3 with more pullover pranks and more over the top shenanigans than ever in this latest installment of the cult comedy classic, Rod Barva's wildly over the top Indian engagement to Thorny sister spirals out of control. A debaucherous bachelor party, a wedding that Thorny is desperate to stop, and a dangerous drug smuggling ring all threaten the troops, friendships and future. Fill your leader of cola, grab your buds and roll up to the multiplex for Super Troopers 3 only in theaters August 7th. Get tickets. Meow.

[Market Analyst]

There's a lot of noise in the business world today. Leaders like you need clear insights from professionals. You can trust. Navigating beyond the Expected is a new podcast from Truist securities, featuring conversations with investment banking experts at the center of financing deals in manufacturing, healthcare, entertainment, and more. It's practical advice for leaders who need to know what's coming next. [e-mail] BeyondPodcast Copyright Truist securities, Inc. Member FINRA and SIPC.