Revenue Roundup

?? Status in the M&A Involving U.S.-Based, VC-Backed Startups #merges #acquisitions

September showed a resurgence in high-value transactions, particularly in the technology, cybersecurity, and defense sectors. Notable companies like Mastercard and Salesforce executed large acquisitions, indicating a continued strategic focus on enhancing digital capabilities and service offerings. The technology and software sectors dominated the M&A landscape, strongly emphasizing cybersecurity, artificial intelligence, and cloud-based solutions.

This month also featured a balanced mix of high-value and mid-sized transactions, signaling sustained investor confidence in innovation-driven industries. The total disclosed transaction value for September highlights significant investments in technology, financial services, and security solutions.

萬事達卡 Acquisition of Recorded Future | Transaction Value: $2.65B | Description: Mastercard acquired Recorded Future, a threat intelligence company aiming to bolster its cybersecurity and detection capabilities. This move highlights the growing importance of cybersecurity in financial services and Mastercard's commitment to safeguarding its digital ecosystem.

Salesforce Acquiring Own Company | Transaction Value: $1.9B | Description: The company strategically pursued the acquisition, reflecting its continued investment in expanding its cloud-based CRM solutions. This acquisition is expected to enhance Salesforce's suite of services and solidify its position in the CRM and cloud computing market.

Paylocity Acquisition of Airbase | Transaction Value: $325M | Description: Paylocity, a leading provider of payroll and human capital management solutions, acquired Airbase to strengthen its financial management and expense automation capabilities. This deal aligns with Paylocity's strategy to offer more comprehensive services in the HR and finance sectors.

赛峰集团(SAFRAN) Acquiring Safran.AI (ex Preligens) | Transaction Value: EUR 220M (~$260M) | Description: Safran, a French multinational company, acquired Preligens, a provider of artificial intelligence solutions for defense and security. This acquisition underscores the growing emphasis on AI in enhancing national security and defense capabilities.

Mainsail Partners Acquiring MirrorWeb | Transaction Value: ￡50M (~$65M) | Description: Mainsail Partners acquired MirrorWeb, a digital archiving and monitoring service, to expand its digital compliance and web archiving sector portfolio. This acquisition reflects the increasing need for companies to manage and archive digital content compliantly.

The biggest industry acquisition is technology-led (Software, Cloud Services, Semiconductors, AI, Virtual Reality) in volume (20+ acquisitions) and high value (over $10B), emphasizing the sector's drive for technological innovation. The technology sector had many acquisitions, with companies like NVIDIA, Autodesk, and Cloudflare leading the charge. Significant investments focused on enhancing software, cloud services, AI, and other emerging technologies. Major acquisitions included large-scale deals, contributing to a substantial overall value in this sector. However, many of the acquisitions were not disclosed, so the assets' real value might be much higher based on the high volume of transactions.

The second place year to date is Financial Services (Investment, Private Equity, Payments), which showed a lower volume (10+ acquisitions) but the highest overall value (over $15B), indicating large-scale investments in diverse sectors. Financial services and investment firms like Apollo, Hg, and Mastercard made some of the highest-value acquisitions. These firms focused on diversified investments across technology, real estate, and financial technology sectors, driving high total transaction values.

Next is Healthcare and Life Sciences (Medical Devices, Pharmaceuticals, Biotechnology), which maintained a moderate to high volume (15+ acquisitions) and significant value (over $8B), driven by investments in medical devices, pharmaceuticals, and biotechnology. Healthcare and life sciences had a strong acquisition presence, particularly from pharmaceutical companies like Merck and Biogen and medical device firms like Edwards Lifesciences. These companies pursued acquisitions to expand their healthcare solutions, invest in biotechnology, and advance medical research.

Media and Retail (Media, Telecommunications, Retail, Luxury Goods) had a moderate volume (5+ acquisitions) but notable value (over $5B), focusing on digital transformation. Media and retail companies like Cox Enterprises and Saks Fifth Avenue executed significant acquisitions, mainly focusing on enhancing digital platforms and expanding media operations. While the volume was moderate, the value of acquisitions was substantial due to large-scale investments in transforming media and retail experiences.

Event Management and Services noticed 3+ acquisitions with $1B+ this year. Although niche, the event and services industry saw focused acquisitions to enhance event management software and customer experience services. Cvent was a crucial player in this sector, contributing to the overall value through strategic deals.

?? Industry in Focus: #hydrogen

The year-to-date (YTD) venture capital (VC) investment in hydrogen projects shows a dynamic and rapidly evolving landscape. While investment values fluctuated monthly, a clear trend toward significant capital allocation for hydrogen-related innovation is evident. The highest levels of investment occurred in June 2024, which saw $0.4B in funding across 6 deals, followed by April at $0.4B. These figures highlight the surge of interest in hydrogen technologies during the mid-year period, driven by global efforts to transition toward greener energy solutions.

The investment was led by more mature companies, with Series B rounds attracting the largest share of capital at $0.7B, followed by Series A at $0.5B. This indicates that both early-stage and growth-stage businesses are drawing significant attention. This balanced investment profile underscores hydrogen's appeal across all stages of development, from innovation to scaling. The leading volume of deals stays in the United States, which includes 9 deals, followed by China with 7 and the EU with 3 deals.

?? Stock Charts - iShares China Large-Cap ETF #chinastocks

This is the hidden process in all conversations about stocks. As of January 2024, 265 Chinese companies were listed on major U.S. stock exchanges (New York Stock Exchange, NASDAQ, and NYSE American) with a combined market capitalization of $848 billion, a decline from $1.03 trillion in early 2023. Over 2023, 24 new Chinese companies were listed on U.S. exchanges, raising $656 million in initial public offerings (IPOs). Major Chinese firms such as Alibaba, JD.com, NetEase, and Baidu remain prominent among these listings.

The NYSE Arca China Index (CZH) tracks Chinese companies through American Depositary Receipts (ADRs) and other stocks, using a modified equal-weight methodology. However, it does not exclusively focus on Chinese firms listed only on the NYSE.

Key Takeaways

• Mixed Returns: Many Chinese ETFs, such as FXI (+11.19%) and MCHI (+6.29%), have posted positive YTD returns in 2024, signaling some recovery. However, the 1-year returns remain negative for most ETFs, highlighting the volatility and ongoing struggles in the Chinese market.
• Underperformance: Compared to U.S. equities, Chinese ETFs have lagged behind. This underperformance reflects China's broader economic issues, such as slowing growth and geopolitical concerns.
• Potential for Recovery: Contrarian investors may view Chinese ETFs as undervalued despite current challenges. With some showing positive YTD growth, there may be a potential upside in the long run, depending on how China's economy navigates its difficulties.

Here are the other ETF performances from last year. This doesn't mean you wouldn't make money if you bought it at the right time. It proves you can always gain with timing, but timing is for masters of trading.

iShares China Large-Cap ETF (FXI) | YTD return (as of August 31, 2024): 11.19% | 1-year return: -0.44% | Despite a strong year-to-date return, the overall 1-year performance remains slightly negative, indicating that large-cap Chinese companies have faced volatility.

iShares MSCI China ETF (MCHI) | YTD return (as of September 2024): 6.29% | 1-year return: -2.46% | While the ETF has seen positive performance in 2024, its 1-year return reflects continued pressure on the broader Chinese market.

KraneShares CSI China Internet ETF (KWEB) | 1-year return: -6.40% | This ETF, focused on Chinese internet companies, has experienced notable losses, reflecting weakness in the tech sector.

SPDR S&P China ETF | 1-year return: -9.11% | This broad ETF has faced significant challenges, posting some of the weakest 1-year returns among Chinese ETFs.

Xtrackers MSCI China UCITS ETF | 1-year return: -2.66% | Similar to other broad-based Chinese ETFs, this one has seen mixed results, with moderate losses over the past year.

?? Contrarian Point of View This Week #ai #generativeai #appliedai #adoption

So.. this is an exciting point of view. We are more than a year from the release of the ChatGPT and a few other similar tools like Gemini, Claude, etc., yet the innovation and interest score makes sense as everyone is trying to figure out how this will fit the rest of the industries. Ultimately, the pragmatic approach to everything takes over the charts over time. That's what we see now as a trend when we look at Applied AI vs Generative AI. Or is this just a result of a hyped marketing effort that makes the organizations think they are adopting? I guess time will tell.