Billionaire Status and Future Impact

This BBC podcast is supported by ads outside the UK ever invest in something that seemed incredible at first didn't live up to the height. Like those five dollar roses at a gas station or a second hand piece of technology that breaks in the first ten minutes Marketers know that feeling. We optimize for the numbers that look great. impressions reach and reacts But when they don't show revenue Well That's a not so great conversation with the CFO LinkedIn has a word for that. Bull spend Now you can invest in what looks good to your CFO. LinkedIn adds generates the highest roWas of all major ad networks You'll reach the right biers because you can target by company, industry, job title more. So cut the bulls bend Advertise on LinkedIn. the network that works for you Spend two hundred and fifty dollars on your first campaign on LinkedIn ads and get a two hundred and fifty credit for the next one Just go to linkedIn d. com slash broadcast That's linkedIn d. com slash broadcast Terms and conditions apply. Ask yourself, what are your best people spending their time on right now Exense reports, receipt chasing, month end clothes that takes weeks. You become what you spend on it, and that's not what you're building towards ReX is the intelligent finance platform that eliminates that work before it starts. AI agents that handle the manual stuff automatically. So your team can spend their time on what actually compounds It's time to get Brex AF Learn more at brex d. com slash a twenty twelve, we're in a ballet studio in Brazil. A teenage girl balances on one toe, the other leg pulled impossibly high, and she holds her breath Beneath her raised thigh, a cigarette ember glows, almost close enough to scorch her skin, but not quite touching. This cigarette is held by her teacher waiting to see which will break first, the muscle or the girl's will. But she doesn't waver. and this discipline and determination will mean that in just over a decade Ballerina We'll be a billionaire Welcome to Good Bab Billionaire from the BBC World Service. Each episode, we pick a billionaire and we find out how they made their money. We take them from zero to their first million and then from their million onto a billion. I'm Simon Jack. I'm the BBC's businessiness editor and And Im ing Singg, I' a journalistuth and podcast. So our billionaire this episode is Luanna Lopez Laura just thirty years old, currently worth two point six billion dollars. That makes her the youngest self made female billionaire in the world, beating one of our former billionaires. Yep, sorry, Lucy Guro, you are no longer in the top spot Now you may not have heard of Luanna. She's kept her personal life largely private. It's actually quite hard to find out that much about her, But don't worry because there is a lot to talk about in this episode. And that's because Luana along with her business partner, founded the financial tech company Cali. everything. And that's an important name. Kaussi is at the forefront of something that's been called gambling, but in her words, it's just another form of trading. Trading or gambling, a very important distinction as we'll discover. Now Kalcii is a prediction market. What the hell is that Well, it lets anyone place a bet on the outcome of an event, any event in the world And that was something that was up until Luana came along completely illegal in the United States. Yeah As Luana says, they'd look for events that have been ripped directly from the headlines. So for instance, you go on to Kausi, you might be able to place a trade on how much snow will fall in New York during a particularly bad snow storm. Who will win the winter Olympics, men's hockey gold medal What will be the price of a rare laboou doll? And of course, who will win the next US presidential election? You can think of Kausia as being like the love child between Wall Street and Vegas. so the whole world is a casino and everyone a player. But crucially, in the United States, it is not actually considered gambling or betting Why? Well, let's travel back to the beginning to find out. You can bet It's going to be quite the story Luana Lopez Lara was born in nineteen ninety six in Brazil. as a child, She lived in various cities around the country, ending up as a teenager in Juanville. Her family was big on maths. Her mother was a math teacher, Even her father was an electrual engineer who had worked at IBM. Her oldest sister got a degree in chemical engineering and a PhD in industrial Engineering, Smart Fily. Not surprising then that Luana attended the Tupee Technical School, which focused on teaching sciences But her first real passion was ballet. Maybe this is one of the first ever ballet billionaires we've ever covered So in twenty eleven, at the age of around sixteen or seventeen, she enrolled in a ballet school called the Escola d Tietro Bossooy. And this is the only branch outside of Russia of the celebrated, sometimes controversial Bhooy ballet company. and the Brazilian school granted one hundred percent of scholarships to all students. But you can bet there was a rigorous selection process. And Luanna calls these high school years the most intense of her life. and this is someone who, you know, at one point built a one eleven billion dollars startup And you say rigorous, the days were exactly that. Academic classes were from seven AM till noon and then ballet classes one to nine PM. She's just a teenager, remember. Ballet school emphasizes, I think like most of them do, the importance of discipline She claimed that her ballet teachers hell lit cigarettes as we were hearing under her thigh while she extended one leg to her ear to see how long she could keep her leg up without getting burned And this environment did not exactly build camaragerie among the students there. And she also claimed that dancers would hide glass shards in each other's shoes in order to injure their rivals and get ahead We couldn't find any response from the school of teachers to those particular claims. Well, as if the schedule wasn't grueling enough, Luanna would study late into the night for academic competitions. So she won gold at the Brazilian Astronomy Olympiad, bronze at the Santa Catarina Mathematics Olympiad So I mean, this is clearly a really driven person. It's not enough that she wants to be good at ballet. She's got to dominate maths and science as well. Horribly competent in all fes, it seems. I know. I have to say I did ballet it was a small child V very small. I' I'm say like a surprise. But can't you tell from my grace or demeanor There was, I think, one girl in my class who became my friend and she's now ballerin Really, you know, you could tell from the get go that she was driven. There's no way I could have even remotely reached a level. It takes a certain kind of mindset to get to that point. And if you're the kind of person who wants to get there and also win golden astronomy competitions, you're quite a rare figure. Yeah. Melinda French Gates, Bill Gates' ex wife pointed out the only correlation they can find of women in the C suite, that CEO, CFO, CTO, etcetera, is that they all played sport And the thesis of that, says Melinda Gates, is that they didn't mind failing because in sport, you are bound to fail sometimes. That's interesting. Yeah. And after graduating, she spent nine months in Salzburg in Austria, performing as a professional ballerina. a season of Swan Lake and she said, I always wanted to be the best I could be. That's why I fought to dance at the Bolshi and then decided to pursue the best universities in the world. When I told my parents this was my plan, they basically said, Well, let a try. Wh knows? It might work out and boy did it For Luana, the best universities meant moving to the United States. but most American students start the process of preparing for university admissions in the very first year of high school, right? preparing for the SATs and things like that. So Luana was actually rather late And she also felt insecure about writing these applications. She was scared that her focus on ballet would be viewed negatively by these elite academic institutions. Yeah. Well, they probably like that sense of discipline and pursuit of perfection. and she needn't have worried because she got accepted into three minor universities called Harvard, Yale, and Stanford. You might have heard of them? You might have heard of them. Quite a lot of our billionaires went to one particularly Stanford, but she did not. She actually chose to attend Massachusetts Institute of Technology, better known as MIT, and it's worth noting that education in the U.S is inccredibly expensive At the time she was going, it was probably around sixty thousand dollars a year, probably about one hundred thousand do at the time recording But fortunately she got a math scholarship from the Eudar Foundation, which pays for tuition for talented Brazilians. So Luanna moved to the United States in twenty fourteen to study for a bachelor's degree in computer science and mathematics, and then a master's of engineering According to Luana, the great advantage of the university for me wasn't the classes and the things I learned, although they were excellent, it was the people I came in contact with. I think that's true of any university experience, isn't it? It's that's what you take away with you. you know, your friends but also a network sometimes of people, particularly at some of these elite US universities and into this crowd walks Tark Mansw. He was an international student, also majoring in computer science Born in California, but had grown up in Lbon been eleven years old during the two thousand seven Lebanon conflict. Now like Luwana he, of course, having got there was an overachiever. He taught himself English while studying for the SATs. He finished second in France's math Olympiad or maths Olympiad which sounds more mind bogglingly difficult And she would always sit in the front row in their advanced computer classes So was he and soon they started to sit next to each other and they became friends. God, what happened to gifted children becoming burnouts and failing? This clearly did not happen to either of them because their holidays were not spent relaxing at home. Lu Anna Major, she got internships at really impressive financial institutions like Hedge fund, Bridgewater Associates, and Citadel Security These are literally the biggest hedge funds in the world, you know they run by Ken Griffin runs Citadel, Ray Dallier runs Bridgewater. These people are multi multi billionaires They are powerhouses on O Mall Street. And internships are like gold dust. Well in their senior year in twenty eighteen, both Luanna and Tarrek got an internship in New York at Five Rings Capital. That is a big proprietary trading firm. so they trade their own money rather than their clients. And it sells itself as this kind of casual, young, fast paced place, There ass a flat structure So there's not this hierarchical you know organization of guys in suits at the very top. And it was one evening walking back from work, they had their Bulb Eureka moment When Loanna had an idea that would change both their lives, she'd noticed two things while working at Five Rings. First that traders would price in external events to their investment decisions. for example, an upcoming election, might make things would make more volatile. The hurricane can change things like crops prices And second, that when traders weren't working, they were almost always cambling with each other on whatever was going on in the news. It could have been absolutely anything. And I've got to say Having worked in financial services many, many moons ago I can recognize that. people would literally bet on anything, whether it was you know, how many corners Arsenal would get in the coming game, you know, be over under about how many runs England would score against India. They would bet on everything. and websites you know cropped up so you could kind of begin to bet on that, but it's pretty limited. and it was called gambling in those days Were you good at it? Did you win anything on those bets I like to think I was, but my memory is probably incredibly selective. Right, okay, good to know. Well Luanna's insight into all of this was that most trading happens in her words, when people have some view about the future and then try to find a way to put that into the markets But she thought there should be a way for people to directly trade on the probability of events rather than indirectly through traditional financial markets. Parrick immediately saw the potential in this idea. So together they decided to create a business and they called the startup Kai, which means everything in Arabic. And that was the core of the idea. So in Tark's words, financialize everything. Everything can be a tradeable asset. The universe of what is tradeable today versus what it can be is so small. anythingything that has a difference in opinion can be traded someday. Yeah. So basically I could say, I think who's going to be the next James Bond or who's going to win the best actor Oscar or actress Oscar. We have a difference of opinion. Suddenly that is a tradeable asset. anywhere where opinions differ there's a potential trade there But you need more than a good idea to become a billionaire. So a few months after graduating, they applied to something called Y comombinator, which we have come across on this program before If you haven't listened to our previous episode on Sam Altman The Y combinator is this kind of accelerator for startups which has created a lot of billionaires, companies like Airbnb, Reddit, Stripe, Twitch, Scale AI, another previous episode. And to win a place on it, Luana and Tark flew to Silicon Valley and competed in a hackathon. computer programming sort of test In twenty four hours, they built a website that presented it to YCombonat's panel of entrepreneurs, pitching it as a New York stock exchange for events. grand title there. Unfortunately, their prototype barely worked, but they were still accepted. A partner of Y combinator, Michael Sibo told them the idea was so unlikely to succeed I had to take a chance. So from January to March twenty nineteen, they spent three months in the intensive program, that kind of hot house program. They got mentoring, plus they got one hundred fifty thousand dollars investment into Kaowshi. And around this time Forbes published its first article about Kashi and its founders. and in it noted that a sizable portion what they were hoping to do was still currently illegal. And let's unpack why that is because The gambling and betting laws in the United States are quite different from elsewhere, certainly from the UK. Online gambling, sports betting, political betting was effectively illegal across most of the United States. However, in twenty nineteen, I remember this, it was a big moment The Supreme Court struck down an act, which made it illegal, which meant that states were free to legalize whatever they wanted in terms of betting on a state by state basis so the state gets to decide. So it's created, if you like a patchwork system where it's legal in some states, not legal in others. It's not ideal to build a big business when you have a patchwork Why Combinator' partner Mike Cosebo said the reason we don't see more tech startups tackle this opportunity is because of the regulatory barriers that make it hard to get a product up and running. But he added, the Cowi founders have the determination to overcome these regulatory challenges Because Luanna and Tark had entered Y Combinator with a regulatory strategy. First, they positioned Kaussi not as gambling. oh, no, never gambling. This was a prediction market. So they wouldn't use traditional gambling wages. Kowshi would use what they call event contracts. Yeah. Okay. And it's a bit complicated this, so bear with it. So Kowshi would allow users to sort of buy and sell this binary idea that either this event is going happen, which is a one or it doesn't happen, it's zero. and price between zero and one dollar. Basically the market would set the probability of that happening and that's when people would exchange their ideas. So you might think that there's a fifty percent chance that Canum Turner is going to be the next bond. I might think there's a seventy five percent chance of doing that. So I would basically be able to trade that thinking that I'm going to be more right than you and so I will make money. So the contract settles at one dollar if the event occurs, zero if it doesn't. And what this platform Kelsi is doing is matching our difference of opinion on an exchange. They're not betting their own money, they're matching people's differing opinions So for instance, imagine the event contract Will Xg Zing become a billionaire in this year? And it's trading at twenty five cents for yes, meaning the market believes there's roughly a twenty five percent chance of that outcome. Thank I' got to tell you that the. That's a massive overestimate. Well, if you bought a yes contract at twenty five cents and I do indeed become a billionaire this year, you profit seventy five cents per contract. Right. So traders can also exit early by selling their position while it's still fluctuating So in that sense, it's sort of like the stock market? So yeah, so I thinks there's a twenty five percent chance that you're going to become a billionaire When you get to half a billion The chances of of that happening obviously have gone up because you're maybe it's a seventy percent chance now that you're going to make it all way to a billion. I can cash out my position now because I've taken it from twenty five to seventy five. So in that sense, you're right. It is a bit like the changing fortunes of a company or a stock market. So you know, in a way and you can sort of see the logical kind of leap they've made there I mean, your mileage may differ on this one Yeah. But if you're asking, how does Kelsci actually make money of all of these event contracts how she would make that cash by charging a commission on every trade. And of course, you, it also has the potential to sell data to traders, to businesses, political parties, et cetera Importantly, prediction markets were already regulated by the Commodity Futures Trading Commission under commodities law, not under gambling law. So event contracts like the one that Kaussy was trying to produce are treated as financial derivatives rather than So Kaowi was saying, oh, no, we're not your classic bookies or gambling, firms. We're actually a financial exchange for predictions. And this argument is absolutely fundamental to how this whole story pans out because what they needed to do this was a federal license, federal meaning it'll work in every state from the Commodities and Futures Trading Commission But this is not going to be easy. There already existed some examples of prediction markets, but there were strict limits on the amount you could bet, sorry, trade and the number of traders, large scale fully commercial event prediction platforms were not broadly approved. So they're breaking some new ground here And you might ask yourself, why is this the case? Well, the regulators had always been concerned about insider trading. Bingo. So a real world example from this very year, someone earned four hundred thousand dollars in profit on a rival prediction market, not Kausi by betting the exact date that Venezuelan President Nicolas Maduro would be forced out from power The suspicion, of course, was that they had prior knowledge that it would happen on that day because they had some kind of real world link to the Madio presidency. Similarly, there was a lot of activity on Kausi around military action in Iran And you know this is really worrying because it could incentivize investors to influence events in the world. So imagine you're a lawmaker who delays a bill because you can earn some big bucks on a prediction market. So this was always going to be an uphill struggle to get regulatory approval. I mean the insider trading potential would seem to me to be vast. and indeed that military prosecuted for that particular example. and what is amazing to me is that If Zone came and bet big on the exact date that a Venezuelan president was going to be forced out of office. I'll go, hang on a second What do you know that I don't? What do you know that I don't? Eactly. So you know, anyway, we'll get into that it's up greater length But Luano and Tarek said that one day at Yominany to the accelerator they were in, they cole called over sixty lawyers they'd found on Google Every single one of them told them to give up. People have been unsuccessfully trying to do this since the nineteen eighties and Luanna and Tark they werere too young, they're too small frry And she said right out of college we were taking on an insane amount of risk. It was two years without a single product, notothing launched. And if we didn't get regulated, the company would just go to zero. But then they found just the man that they needed, a guy who was a lawyer and former CFTC official called Jeff Bandman, who promised them that the landscape was changing. Jeff knew the CFTC, he knew the people inside, so he agreed to lead their regulatory strategy. Talk about angel dropping from. Well, this is interesting. They' very often these kind of non player characters in these stories that you seem to have just wander on to set in this drama and are absolutely pivotal. And Jeff Bandman, who I don't suppose anyone has ever heard of. instrumental in this story. They had first approached the CFTC, the Commodity and Futures Trading Commission In the spring of twenty nineteen When CoVID hit Luana was in London, Tark was home in Beirut. He was there during that city's port explosion. I just remember that incredible boom that killed over two hundred people. And for weeks he would go searching for survivors during the day who work on Kalci at night But with the guidance of Jeff, Louanna and Tark spent over a year lobbying the commission on Zoom Before each meeting, this is interesting, they would memorize a script that they were going to sort of you pitch to them and they would memorize it word for word. so they were on message the whole time Now, during this time, Kai wasn't the only game in town. A few competitors had popped up, most notably poolymarket, who unlike them hadn't sought regulatory approval and were letting people bet vast sums of money anonymously with cryptocurrency.. In this case, it actually helped Kowshi because they were trying to do everything by the book. Yeah, they could say they're the good corporate citizen here. They were trying to jump through the right regulatory hoops But while they were working to become legal at all, they were also trying to raise money, they got big support from a venture capital firm called Neo. Now NIo was founded by an early Facebook investor called Ali Partovi, and NO led their seed funding that' some of the original capital you get in, and that brought some validation. that somebody like that was prepared to back them The market sits up and pays attention. Well, if this guy's backing them, maybe there's something to it. More traditional Wall Street investors like Sequoia Capital, they crop up in a lot of our stories They were waiting to see that crucial thing about what happens with the CFTC, the Commodities and Futures Trading Commission And then in november twenty twenty, after two years of back and forth, Luanna finally got a call from the chairman of the CFTC, who hadd been appointed by President Donald Trump the previous year. And the chairman said You now stand with markets that have been around since the eighteen forties. I have no doubt that in time you'll grow to be a powerhouse too. And so for the first time ever in its history, the CFTC had given its approval to twenty four year olds Kaus she was the first federally regulated events based trading exchange in United States history. And this is a big moment. and now it was time with that in their back pocket to raise some serious money. Within weeks they announced they'd raised thirty million dollars in a series A funding led by venture capital giant Sequoia, we just discussed. So Luanna Lopez Laura is a millionaire At the start of twenty twenty one, age just twenty four. ever invest in something that seemed incredible at first didn't live up to the height. Like those five dollar roses at a gas station or a second hand piece of technology that breaks in the first ten minutes Marketers know that feeling We optimize for the numbers that look great. impressions, reach and reacts that when they don't show revenue Well That's a not so great conversation with the CFO. LinkedIn has a word for that. Bull spend Now you can invest in what looks good to your CFO LinkedIn ads generates the highest roWas of all major ad networks You'll reach the right buyers because you can target by company, industry, job title more So cut the blls bend Advertise on LinkedIn. the network that works for you Spend two hundred and fifty dollars on your first campaign on LinkedIn ads and get a two hundred and fifty credit for the next one Just go to linkedIn d. com slash broadcast That's linkedIn d. com slash broadcast Terms and conditions apply. If your best finance people are doing expense reports, chasing receipts, or spending time on monthnd clothes, it's time to get BEX AF, a gentk finance that eliminates that work before it starts. Learn more at breEX d. com slash AF This is the story of the One The one who keeps multiple buildings running smoothly, day after day. Plumbing that flows, HVac that hums, cleaning supplies that keep surfaces sparkling That's why she counts on Granger. With easy reordering online and twenty four seven support, Granger helps her keep the product she needs on hand So shelves stay stocked and buildings stay ready. Call one eight hundred Ganger, clickgranger. com or just stop by Granger. for the ones who get it done Granger knows when you're a procurement manager for an office park You're not managing one building, you're managing all of them. And to stay ahead, you need to see through walls and around corners Light's about to fail, filters ready to clog, H backack on its last leg. If you wait until something breaks, you're already behind Count on Granger for quality products, easy reordering and twenty four seven support. Call one eight hundred Granger, clickranger. com or just stop by Granger. For the ones who get it done Let's take this twenty four yearuro from a million to a billion So this was, if you're keeping track of the timelines. this was only five years ago. So this is going to be one of our fastest journeys from millionaire to billionaire And Kaowshi is now legal and it's got funding, But the real question is, are people actually going to use it? So it's july twenty twenty one. It's time to open it up to the public. And at this stage, it was just a website. A smartphone app was still to come. and initial activity was you modest. Well you know it takes a bit of getting your head around Eventually more and more contracts started to roll in And some officials at the CFTC became a bit concerned. And according to Bloomberg, the divisionC, demoralized and Iran, kind of accepted defeat and stopped fighting back, some of the people say. By the end of twenty twenty one Three senior officials had left the agency, including the head of the division and the head of the product review team. Interestingly, a former member of the CFTC joined Cowsci's board not long after leaving. Gamekeurn poacer Tk about a revolving door. Yeah. Well, soon Kauhi had dozens of events contracts on their website, thingsings that people could essentially bet on on issues like, will there be negative GDP growth by Q four? Will NASA land a person on the moon before twenty twenty five? Who will win the Oscar for Best Actor? Yeah. I mean, I recently was following the Met Gala and people were betting on designer a wrapper called AA Rocky was going to wear.ight. I mean, it's that tiny, minute detail. That's the kind of stuff that people are betting on. And you know somebody knows the answer to that. Exactly. It' very hard to figure out. At the end of twenty twenty one, they launched markets on the outcomes of US Supreme Court cases. realal moral hazard in this one, I think A hugely popular bet was whether the Federal Reserve Chair Jerome Powell, Jay Powell would be replaced by the then President Joe Biden. It got over nearly a quarter of a million contracts At this point, wages were cap at twenty five thousand dollars, but Luana had the ambition to push that limit much higher. Six months after the launching to the public, they had processed ten million dollars worth of trade. so it's beginning to get some momentum And the world was taking notice. Forbes put Luana still twenty five years old on their thirty under thirty list for twenty twenty two. And at this stage, Tark was acting as more of Kaussy's public face. It's his picture, for instance, in the Forbes article All of this makes it quite hard to get a sense of Luanna and how she's feeling at this point I mean, if you look at her Instagram profile, she's this kind of Ver blonde statuesuesque. I mean, you can tell she used to be a ballerina. She holds herself really upright. All activity from before twenty twenty four on her X account, her Twitter account is missing. So she's quite a private person. Right. Okay. We know, however, that the company itself was growing fast. That year they had an office in New York. They had a staff of thirty two In one of our Instagram posts of their first office, there's a sign that simply reads Make money at Calcii. And they were by this point trading two million contracts a week And over the next couple of years, Kashi slowly grew its user base. In twenty twenty three. They are their first individual user. across a million dollars in yearly income on Calchi. So they were making a million just from Basically Tr Trades event contracts. And on the horizon, there was something very important about to happen. The Trump versus Harris presidential election. and Kausy, of course, knew they were ready to capitalize on this big event. Yeah. But there's a little setback for them. In twenty twenty three, the CFTC police, if you like, for this area, blocked Cowci's contracts on the election. They said they look too much like gambling and were not in the public interest. But Luana decided to fight back against the advice of her investors, she sued the CFTC on the grounds that the regulator had overreached overstepped its bounds. And the suit claimed it is undeniable that election outcomes have consequences for everyone. They play a pivotal role in determining our collective future. So they're important. they can be traded. Well jumped forward to september twenty twenty four just weeks before the election, and the US district court judge ruled in favor of Kaussi. So this meant that again Kaussi made history by offering the first legal election contracts in the U.S in over a century. And of course Kaussi's users wanted to bet on the election. so Kaushi's search to number one to the number one spot on Apple's App store. Yeah. because people do like to betnd on politics,, it happens in the UK quite a lot. It's actually perfectly legal and but it's called gambling over here. Although interestingly, Kaushy is not allowed to operate in the UK. No, it is not In fact, I tried to sign up before this thing and say, sorry, illegal in your jurisdiction.'t too bad. I was really wanting to have a go Anyway, U What's interesting is that with so many bets coming in the days before the election, Kelsey was actually strapped for cash But remember that early investor we talked about Ali Potovi at NeO He whatsApps both of them to let him know he was he's going to wire them. By the way, I'm going to wire you twelve million dollars. That's five million from Neo, his company and seven million do from his own back pocket for me personally And in his message, he said, we can figure out the terms later says no one ever I mean I feel like I've hit the jackpot if my friend pays for my Uber. I mean, let alone seven million dollars. And in total us in total, users bet five hundred million dollars in that election on the candidates. And Kowchi predicted Donald Trump's victory more accurately and faster and before traditional polls. That's really interesting Well, with political betting now on the table, it's time for serious money, even more serious than the figures you've talked about before to enter the chat. So Luanna hadn't sought investment for three years, but over twenty twenty five, she held three funding rounds. so you call these W CDE funding rounds, in June, they raised one hundred eighty five million dollars led by a crypto venture capital firm called Paradigm. This now placed the company at a two billion dollars valuation, making it officially a unicoron. Which is basically a startup which is worth over a billion dollars. And in October, they raised another three hundred million do led by Sequooyia Capital and Andreas and Horace Rritz K she was now worth five billion dollars and that is one hundred and fifty percent increase in just four months. And when you've got Sequoia and Andreas and Horowitz behind you, you that means that they're considered the smart money in Silicon Valley. These people have made billions about backing winners. But actually that's not just it because two months after that, in December, they raised a further one billion dollars Yeah That's a very rapid capital raise, I would say unusually rapid, although we keep setting new records. Nevertheless. Clearly, the venture capitalists think that they're ono something something that could be very big and they are piling money in hand over fist. while this last funding aroundound valued Kaowshi at eleven billionars in total. And by this point she owned twelve percent of the company, putting her net worth at one point three billion do.. So age just twenty nine, this made her the world's youngest self made women billionaire actually ousting a previous billionaire we've covered on the show, Lucy Grol from her very top spot. That was a short lived reign for Lucy, wasn't it in crazy world. She can always claw it back though, I'm sure she could. I'm sure she's not suffering too badly Let's just take Luana beyond a billion because at this point, once you've got that billionaire tag on you The media really started to paying attention, Ful ran a huge profile on her Tark was sort of bare mentionionsed he's being shoed slightly to the background. She's become more active on X. She posts funny quips and memes. Her banner image on X is a South Park meme. And her pinned post is a response to a Bloomberg article titled To Math Nerds Crack Oen Legalized Gambling on Wall Street, to which she jokes, I prefer calling myself a math connoisseur, but fine. Well She's got a sense of humor. Yeah ye. She also seems to have a lot more confidence, and it's no surprise because by the end of twenty twenty five, Kelsy was trading over a billion dollars every week I think it's still relatively niche and I wonder how many of our listeners have used it or heard of it because we don't allow it in the UK. I doubt for how many people I think people have I think people have heard of it, but probably might not be able to use it wherever you're listening or watching this, because I I say, in many countries it is, there's quite a long list of countries where It's illegal, but it's piqued the interest of people worldwide For two reasons. One is you know, it's kind of funund to build to a bet on how much rain is going to fall and you know, it's a bit like betting on raate Sorry. trading on raindrops running down a window pane. You know, who hasn't done that? Or two snails racing or something Exactly? Do know what I mean? It's sort of kind of fun But also I think people thinking, gosh, there's surely there are going to be people who actually know what's going to happen who will have an unfair information advantage, which usually the police of the trading world are very, very hot on. so it still seems to some I think, like a bit of an anomaly. Well Luanna's next move I think, was to position the company to try and get it to break the mainstream. Yeah And to do this, you know, she's partnered with some household names. So Kaowsi has made a big deal with Google to include their prediction market data into its finance platform. So essentially being able to stand up and say, hey, we're on the same level of the big dogs. It's like almost like the ticker that runs down on those financial shows like CNN and CNBC. And so those news channels are actually going to run real time news tickers displaying Kalsi data along the bottom of their screens.. And so in march twenty twenty six, they also announced they're expanding outside the United States. They launched their first ever international operations in Luana's home country of Brazil. Yeah. So obviously she's probably considered a homecoming hero in her home country. So we've tried to explain what Kausci is. We've understood how big it can be because basically, as Tark said in the early days,, the universe of what you can trade kind of small at the moment, it's like share prices or the price of copper or gold This is everything, what Kausi means in Arabic. This is you can trade Every And therefore, you the addressable market is almost infinite, really, because it means you can pretty much bet on anything. But As we said, you know, there are those grave concerns. As we've seen in this case against the military guy from Fort Bragg who bet on the Maduro being ousted he's being prosecuted because you know, somebody knew what was going on and that's why, you know, those concerns continue to hover over this industry Exactly. I mean, it's worth talking about some of those concerns in detail because the first one that comes to mind is Is Kowi just gambling disguised? In finance terms. I'm not saying anything And you know, we know the negative effect that gambling can have on some people covered that story in Denise Coatz's episode. She's the founder of Bet three hundred sixty five. Arguably, you could say this could be more addictive because like you say, the market for potential bets is infinite. Because everyone's got an opinion about something, haven't they? Now People might not have an opinion about whether Microsoft stock was going up or down, so they wouldn't be trading that. Now everyone's a football fan Everyone's got an opinion on who should be the next James Bond or who should win the best actor Oscar. So if you're inviting those people into this world of trading, you're increasing the universe of people who will take a punt on something because they think people have they always think they write and they think everyveryone thinks they've got the inside information. Now what Cal She says that argues that it is highly scrutinized, it's regulated. And Tark has said in casinos and gambling houses, the revenue they make is out of customers' losses, out of their pockets You get these weird incentives in the industry for us. We just take transaction fees We're not taking money out of anyone's losses. So our gain is not our users' losses. The losses are between the users, not you against the house, if you see what I mean? Right. I mean If you're on the losing end of a five thousand dollars events trading contract, I think you would struggle to see the difference. Yeah, I guess that's right. And we've talked about, you know traders with in depth knowledge of events. someome people know more about stuff than others, some people are more informed And Kowi's got an argument for that too They say it democratizes financial opportunities for the average person saying, you know, why not, you know Maybe you know as much as everyone else. That is an interesting take. I mean, on the other side on the other hand, you could also argue it just turns politics and real life events into just a game, right? You know S shouldould we really be turning political decisions about who should be the next prrime minister or president into tradeable assets?? Is that the kind of mentality we want to be encouraging in people? I suppose the worry is does the tail begin to wag the dog in the sense that the the financial interests of the outcome becomes an agent in determining the outcome. You see what I mean? Right. Yeah. So because you want to win big on an event contract about Trump becoming president.. You end up voting for Trump. Yeah, because you see that the odds are in your favor. Yeah. Or you know, is this going to happen before a certain certain date, for example I might ring the person who's got, you know who makes the decision on when this decision is going to happen and say, I've got a lot of money riding on this B it with you if you push it out another month or two. For example I'm not saying this happens, but you know clearly there's potential for that. We've already seen rumours about this kind of stuff. so people were speculating that when the White House press seecretary, Caroline Levitt abruptly ended a press conference early right before the sixty five minute mark Traders on Kausshi had bet thousands of dollars on. And now important to say neither the White House nor Kaushi have commented on this. But Kausshi argues that when it comes to politics, for example, it actually enhances democratic engagement. Participation can lead to more informed discussion, more informed analyses of election outcomes. Yeah, I guess if you've got a few grand riding outcome of an election you will be incentivised to keep up with the news. Yeah for sure. Well, Kaosi says, on its part that it explicitly bans insider trading and investigates suspicious behaviour And you know, there are supporters of these prediction markets. People say that they can be a force for good. So better forecast, for instance. Prediction markets are often actually very accurate in the same way they predicted Trump winning the presidency. they attract people with good information. So you know that news broke ahead of mainstream outlets during the election. Well, let's not forget Kausshi and other prediction markets are going to make some people a lot of money. In fact, Donald Trump juni. actually joined Kausshi's advisory board in twenty twenty five. I see. And it's definitely made our ballerina a lot of money In may twenty twenty six, it was reported that Luanna and Tark had more than doubled their net worth in just six months after yet another one billion dollar funding round. Okay. so that is still growing. They've made a ton of money It's controversial, it's illegal in some countries, but it seems to be doing fantastically well in the US So what we need to ask ourselves is the question, is Luanna Lopez Lara good, bad or just another billionaire? First, we do this fun bit where we score our billionaires on several categories from zero to ten on categories wealth, controversy, power, and legacy and we always start because that's the name of the game on this podcast with wealth. What do you reckon? Well, Luanna currently worth two point six billion So entry level billionaire compared to some of our bigger fish like Elon Musk, we went from a million five years ago to a billion. And remember A billion is a thousand millions. this is a very rapid ascent indeed. I mean, yeah, it is increasing rapidly. And you know a lot of people think Kai and other production markets could be worth a lot more we often look about how far they've come. is it a ragster Riches story She came from Brazil, but from you know from a solidly middle class educated family. She went to the best schools. She was a high achiever. She went to MIT. So I'm going to give her Just on the sheet. speed that she's gone from a million to a billion I'm going to give her higher than I would normally just for the absolute number, and I'm going to give her a six because I think it's incredible how quickly this is growing Oh, I think I'd be inclined to agree with a six out of ten. Okay because that amount of growth in her bank account. I mean, in how much she's worth. Yeah. That is actually quite exceptional, given the fact that she's only thirty this year. Wow Okay, six for each of us, controversy. There's quite a lot to choose from. quite a lot, isn't that?. I mean, know we've talked a lot about the controversy about issues related to prediction markets, the potential for the amount of money riding on an outcome to influence the outcome itself and become a factor. You know, the potential for people to get way too involved and develop addiction issues. Yeah ye. I mean, all of those things relate to the business model rather than to Luanna herself I think there's no suggestion that she's behaved improperly. do think however, we are at the early beginnings of K she and other prediction markets. I think it'll take a while for the full ramifications of their existence to become clear. I think it's yeah, it's quite early to tell. Nevertheless, I'm going to give this a high school I'm going to give her an eight. Wow. I'm gonna give her a seven actually. Okay. because I think the very existence of prediction markets I think there's room for them to grow in controversy, even more so. Okay. So you're giving seven with room to grow. Yeah, I like it.om to improveom improve if that's the way you want to look at it. Power I mean because of her this new thing exists in the world or, you know, certainly because of her almost unbelievably successful efforts. persuade the authorities that this was a go and therefore it became a federal to all US thing That's pretty amazing. So you know, without her, you could argue that you know Maybe this wouldn't exist. Oviously this poly market as well her convincing the CFTC that this was not gambling and this was trading. that was a major coup. Yeah. And bear in mind, at the time they convinced the CFTC they were just a couple of twenty something Eururo Yeah. And people have been trying for this for decades to try and get this approved and No this. Yeah. Yeah. I mean, interestingly partner at Cowy's investor Andreress and Har said There are few better trainings for being told no and pushing through anyway than being a professional ballerina. An injury, even a short restk could mean losing your spot. Luanna learnnt persistence with Grace early on and she's carried that same calm confidence into building Kelchi. So we've sort of mentioned this already, but basically poly market was not regulated or approved and now it is thanks to Celsy and her efforts. So in a way, that market now exists legally because of her And who knows how powerful this will become? We've talked about some of the potential repercussions