Dear Clients and Friends:
Our latest report on the values and trends in the dozen+ segments of the information technology industry that we follow, and sometimes lead, can be found here.
The information technology industry has been a global one for many years, and to us, that’s a good thing. Good software engineers, code writers, mathematicians etc. are everywhere: US , Canada, UK, and Ireland; Russia, and Ukraine; Israel and Palestine, Turkey and China; Australia, New Zealand, South Africa and a half dozen other countries.
Recently, this globalism has come under attack. There are several good reasons including some very real hacks, malware, worms, phishing, spoofing and more. And part of the reason globalism has been under attack is because politicians have been railing against foreign workers.
As a result, people have begun to ask questions such as: “Has Kaspersky’s antivirus software become a Kremlin tool? Can we trust code written in China? Do the Israelis put a back door into their code just in case?” (And for others, “…Do American software manufacturers employ similar tactics?”)
While the questions are legitimate, globalism is a big part of what has made the information technology industry great. It’s what will keep it great. We are not naïve. We’re aware of specific incidents of government intrusion into the industry. But for the most part, it’s a system that has worked well. So our preferred approach is threefold: trust AND verify, and keep the politicians out of it. The globalization of IT has worked well for decades. Let’s not mess it up.
There were quite a number of interesting transactions in the global information technology world over the past month. Many are discussed in the enclosed report. A few of the more interesting ones include:
- Adobe (NASDAQ:ADBE) agreed to acquire Marketo for $4.75bn,
- Udaan (Bangalore, Karnataka) raised approximately $225mm in a Series C funding round led by DST Global,
- Nasdaq (NASDAQ:NDAQ) agreed to acquire Cinnober for SEK1.7bn (~$190mm), valuing the company at an implied 4.4x LTM revenue,
- SurveyMonkey raised $180mm in its IPO, implying an enterprise value of ~$2bn and valuing the company at an implied 8.8x LTM revenue,
- Lianlian (Hangzhou, China) raised ¥1.0bn (~$147mm) in a Series C funding round led by Sequoia Capital China and Boyu Capital,
- CoreLogic acquired the remaining 71.96% stake in Symbility Solutions for CAD 110mm (~$83.8mm), implying an enterprise value of CAD 130.2mm (~$99.3m) and valuing the company at an implied 3.0x LTM revenue and 33.7x LTM EBITDA,
- Akulaku (Pasig, Philippines) raised $70mm in a Series C funding round led by FinUp,
- Ipsos (ENXTPA: IPS) acquired Synthesio for $50mm.
Please feel free to call us if you have any questions on any of the sectors that we follow.