Financial Technology, Data, and Analytics

Dear Clients and Friends,

The report found below covers m&a trends, values and deals in the four segments of the Enterprise Data and Analytics sector that we follow and sometimes lead.

New York is currently hosting the annual opening of the UN General Assembly. Heads of about 140 nations are in our town and security is tight near our office. Last Tuesday, President Trump opened the session by promising to “destroy” North Korea if that country doesn’t abandon its nuclear weapons program – which they have no plan to do. Ugh.

There was another interesting speech in New York last week – by Masayoshi Son, the founder of Softbank, and one of the world’s most prescient investors. According to the New York Times, Son predicted that within 30 years AI will “replace huge swaths of jobs”, as the power of AI outstrips that of the human brain. Another challenge for us all to contemplate.

AI and North Korean nuclear missiles have many things in common: they both need proper fuel; they both need good guidance systems; they both need wise humans to control their use; and they both need considered responses by those potentially affected. Cathy O’Neil, a mathematician and data scientist applied the term “weapons of math destruction” to many algorithms that underlie AI. Informatica had an interesting blog post found here about the fuel for AI – saying that “the era of blind faith in big data must end”. Pundits have been expounding for years on the potential dangers of (and proper response by the West and others to) North Korea’s nuclear capabilities.

As the power and accuracy of these tools grows, all we can do is hope for intelligence and wisdom by those who control them – and by those potentially impacted by them – because miscalculation by either can lead to disaster.

Some of the more interesting m&a transactions, trends and values in the AI, Big Data, and analytics sectors are discussed in our Market Update. Among other transactions, we note:

• Verisk (Nasdaq:VRSK) agreed to acquire Sequel for $323mm, valuing the company at an implied 9.6x LTM revenue and 20.8x LTM EBITDA,
• Cisco (NASDAQ:CSCO) agreed to acquire Springpath for $320mm,
• Databricks (San Francisco, CA) raised $140mm in a Series D funding round led by Andreessen Horowitz,
• Druva (India) raised $80mm in a growth equity round led by Riverwood Capital,
• Redis Labs (Santa Clara, CA) raised $44mm in a Series D funding round led by Goldman Sachs Private Capital,
• PeerIQ raised $12mm in Series A funding co-led by new investors TransUnion.

We are also honored to be finalists for three awards by The M&A Advisor: One for The Professional Services (B2B) Deal of the Year; another for The Private Equity Deal of the Year, as well as a third for the M&A Deal of The Year which relates to our role advising BillingTree of Phoenix, Arizona on a Significant Growth Investment by Parthenon Capital Partners. For more on that transaction, please click here.