As Bitcoin and Blockchain investment fast approaches $1bn, we have spent the last three months speaking with over 30 of the leading Bitcoin and Blockchain companies globally (with c. $500m of total investment), plus industry groups, financial institutions and investors, to gain detailed insight and understanding of the development of the market and the direction these fascinating technologies will take in 2016.
The S&P 500 is ending 2015 where it started. Yet all is not stable in tech. 2015’s extremism is setting the stage for a turbulent, and unstable, 2016.
Software as a Service (SaaS) has matured. Its elder statesman, Salesforce, is worth over $50B and nearly every private software company is now SaaS. The reasons are clear. SaaS businesses have much more certain future revenue than older “perpetual license” businesses, and can therefore grow more reliably. Also, SaaS companies have regularly received very high investment valuations, generally 5-10x revenue, and SaaS is the only model many software investors will invest in.
Cries of “shock wave” and “bursting bubble” greeted Square’s recent IPO pricing. It’s understandable when the IPO is $2B lower than Square’s last round only months ago, in a stock market that has remained stable throughout the year.
Wealth management is a $30 trillion industry in which the vast majority of “experts” charge 1-2% in fees annually. Despite this charge, on average they perform worse than the overall market.
$1 billion of funding has gone into e-procurement companies since 2011. 2015 could see another $1 billion of funding, 4 times all of 2014’s investment level and by far the most intensive rate of new investment the space has ever seen.
Fifteen years after the dotcom collapse we see another tech crash approaching. ‘Bubble’ and ‘unicorn’ are entering the mainstream vernacular. We are becoming comfortably numb with tech company overvaluations.
Look closely at this Brueghel ‘Instagram’ from the 1500s; at the bottom right corner of this holiday snap is a figure that has just crashed into the sea. The painting: The Fall of Icarus.
Travel technology leaders making opposite bets as industry seeks to transform: Magister Advisors advises Mobile Travel Technologies Ltd on its sale to Travelport.
The rise of next generation Fin Tech companies will trigger a wholesale restructuring of the banking sector. But banks can survive, maybe even prosper, by proactively focusing on becoming world-class ‘NetCo’s,’ standing behind and supporting thousands of ‘ServCo’ startups fighting for customers’ wallet-share across a wide range of financial transactions.