2023-05-25-GP_Bullhound-2023年Q1全球软件报告_35页_1mb

Software Sector Update Summary

Core Content

This report provides an overview of current trends and valuations in the software industry, highlighting key areas of growth and transformation. It includes insights from industry leaders and notable transactions across the public and private markets.

Main Trends and Opportunities

1. Strengthening the Supply Chain: Digital Twins Gain Prominence

• Trend: Organizations are increasingly using digital twins to model and simulate supply chains for better efficiency and visibility.
• Opportunity: Companies with digital twin technology can enter the supply chain vertical or partner with existing players.
• Market Growth: The global digital twins market was estimated at $11bn in 2022 and is growing at a CAGR of 37.5%.
• Key Players: Coupa (acquired by Thoma Bravo for $8bn), Blue Yonder (acquired by Panasonic for $7bn).

2. Data Swiss Army Knife: CDPs Expand Use Cases and Experience Growth

• Trend: Customer Data Platforms (CDPs) are expanding beyond traditional marketing use cases to support broader data management and analytics.
• Opportunity: Integration with AI/ML can create enriched customer profiles, enhancing marketing ROI and future-proofing strategies.
• Market Growth: CDP TAM is expected to grow from $4.8bn in 2022 to over $19.7bn by 2027, with a CAGR of 32.4%.
• Key Players: Pureplay CDPs are gaining traction with vertical specificity, API integration, and app ecosystems.

3. Cost Optimisation: Focus on Financial Efficiency

• Trend: Cost optimisation software is in high demand due to financial austerity, inflation, and tech layoffs.
• Opportunity: Companies can improve cost visibility and control through advanced analytics and spend management tools.
• Market Growth: The global cost optimisation market is projected to surpass $29bn by 2028, with a CAGR of 10.1%.
• Key Players: Coupa, which has been acquired by Thoma Bravo, is a leader in this space.

4. AI in Cybersecurity: A New Chapter in the Digital Arms Race

• Trend: AI is being used by both attackers and defenders, reshaping the cybersecurity landscape.
• Opportunity: AI-enabled security tools are growing rapidly, offering real-time threat detection and response.
• Market Growth: The AI-enabled cybersecurity market is expected to grow at a CAGR of 24.4%, reaching over $94bn by 2030.
• Key Players: Companies like AssemblyAI and Dialogflow are leveraging AI for enhanced security and analytics.

5. Training Software: Enhancing Adoption and Retention

• Trend: Frictionless onboarding and training tools are crucial for SaaS adoption and user retention.
• Opportunity: Customisable training platforms can reduce time to value and improve user engagement.
• Market Growth: The training software market is projected to reach $115.5bn by 2028, with a CAGR of 10.3%.
• Key Players: Userpilot, Pendo, and Appcues are leading in this space.

6. Customer Experience: Conversational CX with LLMs and NLP

• Trend: Large Language Models (LLMs) and Natural Language Processing (NLP) are enabling more conversational and voice-based customer experiences.
• Opportunity: Brands can capture voice data for analytics and offer intuitive self-service options.
• Market Growth: Voice technologies are becoming central to personalisation, retention, and customer engagement.
• Key Players: AssemblyAI, Dialogflow, Replicant, Uniphore, and Voicify are emerging leaders in this area.

Key Transactions

M&A Deals

• Duck Creek Technologies (Mar-23): Acquired by Vista Equity Partners for $2,600m (EV/LTM Rev: 8.4x)
• Event (Mar-23): Acquired by Blackstone for $4,600m (EV/LTM Rev: 7.3x)
• Qualtrics (Mar-23): Acquired by Silver Lake for $12,500m (EV/LTM Rev: 7.7x)
• Coupa (Feb-23): Acquired by Thoma Bravo for $8,000m (EV/LTM Rev: 9.8x)
• Sumo Logic (Feb-23): Acquired by FPIP Branchlog Partners for $1,700m (EV/LTM Rev: 5.7x)
• KnowBe4 (Feb-23): Acquired by Vista Equity Partners for $4,600m (EV/LTM Rev: 14.8x)
• MICRO° FOCUS (Jan-23): Acquired by OpenText for $7,298m
• Servicemax (Jan-23): Acquired by PTC for $1,460m

Private Financings

• PhonePe (Mar-23): Invested by General Catalyst for $642m
• Stripe (Mar-23): Invested by General Catalyst and Andreasen. Horowitz for $6,500m
• Adept (Mar-23): Invested by General Catalyst for $350m
• Rippling (Mar-23): Invested by Greenoaks Capital Partners for $500m
• Nobroker (Mar-23): Invested by General Atlantic for $199m
• Carro (Feb-23): Invested by Za Tech for $463m
• Wiz (Feb-23): Invested by Greenoaks Capital Partners for $300m
• Deepwatch (Feb-23): Invested by ABS Capital for $180m
• Netskope (Jan-23): Invested by Morgan Stanley for $401m

Software Sector Takeaways

Current Software Perspectives

• Supply Chain Digital Twins: Offer real-time visibility, predictive analytics, and streamlined operations, with growing market potential.
• CDPs: Expanding use cases and integration with AI/ML, leading to improved marketing ROI and customer targeting.
• Cost Optimisation: Essential for financial control and efficiency, with significant market growth expected.
• AI in Cybersecurity: Both sides of the arms race are leveraging AI, creating a dynamic and growing market.
• Training Software: Customisable onboarding and training tools are key for user engagement and adoption.
• Conversational CX: Voice and AI technologies are transforming customer interactions and data collection.

Global Software Transaction Trends

• Global Dealmaking Pullback: M&A and buyout values are declining, with a weak showing in private placements.
• European M&A Surge: Activity in Europe is on the rise.
• Emerging Markets Fundraising: Strong relative fundraising activity is observed in emerging markets.
• Tech in Bull Market: Tech stocks have officially entered a bull market since December 2022, with SaaS companies showing resilience.

SaaS Index Performance

• Valuation Trends: Valuations have stabilised and recovered after a significant sell-off, with the disparity between growth profiles closest to pre-pandemic levels.
• Rule of 40%: Public SaaS companies are evaluated based on this metric, which combines revenue growth and gross margin.
• Net Revenue Retention: Incorporating this metric into the Rule of 40% calculation improves correlation with public market valuation.

Public Company Performance

Leading Companies and CEOs

Tomer Azenkot, CEO of Vee24

• Quote: "Customers want to connect with a human, and the results are compelling: improved conversion rates, higher customer satisfaction, and a better overall customer experience."
• Company Overview: Vee24 offers a digital customer experience platform with features like video chat, text chat, AI-enabled chatbots, and online appointment scheduling.
• Clients: Leading brands in retail, automotive, and financial services.

Erik Kostelnik, CEO of Postal

• Quote: "Ninety-nine per cent of businesses currently send direct mail campaigns manually. Postal is helping customers consolidate, budget, and systemise the sending and attribution of offline campaigns."
• Company Overview: Postal is a global offline engagement platform serving over 600 B2B mid-market and enterprise customers.
• Products: Engage, Brand, and ABM for personalising and scaling direct mail campaigns.

Summary of Key Metrics and Trends

• Global SaaS Index Valuations: Stabilised and recovered post-sell-off, with a narrowing gap between high and low-growth segments.
• Rule of 40%: A key valuation metric for public SaaS companies, with Net Revenue Retention improving its predictive power.
• Market Volatility: Continued impact on valuations, with a potential recession risk due to inflation and monetary policy.
• IPO Drought: Software companies are delaying IPOs due to macroeconomic uncertainty and strong private capital availability.

This report underscores the evolving dynamics in the software industry, driven by digital transformation, AI adoption, and strategic investments. It highlights the growing importance of digital twins, CDPs, cost optimisation, and conversational CX, alongside notable M&A and private financing activity.