Venero Capital Advisors

🏦 The Q3 #WorkTech M&A and investment numbers are out: $2.6bn of VC funding across 181 transactions. That's 20% more deals compared to the previous quarter, and flat volume. The increase came from sub-$25m funding rounds, which is a positive sign for the sector. Later stage rounds held up as well. M&A activity was robust, placing 2024 on track to be a record year for the sector. But just about all #HRTech and WorkTech businesses have been reporting decelerating growth for almost two years now, and this is being reflected in their valuations. 👉 Link to report in the comments #hrtechnology #mergersandacquisitions #venturecapital #funding #investmentbanking

The latest episode of the AI Business Leadership Podcast is out! 🎧 This time I chatted with Georgios Markakis, Managing Partner at Venero Capital Advisors, about his leadership journey, what investors look for in AI-driven companies and the importance of integrating AI to stay competitive, and Georgios' prediction for AI’s role in our daily lives in the future. Whether you're a business leader, an investor, or just curious about AI, this episode has lots of insights and advice - I was taking notes for us at SolvedBy.Ai! 😄 Listen on our website or your chosen platform: https://lnkd.in/ebBPfkMQ Or watch on YouTube: https://lnkd.in/ev35ZfBU #AIPodcast #LeadershipInAI #AIInvestment #TechFinance #FutureOfAI #BusinessInsights

Great discussion with Laura Nelson and SolvedBy.Ai about AI in #hrtechnology and the #futureofwork 🤖 Key Takeaways: 🔹 Leadership Journey: My fascinating [sic 😊] transition from computer science to finance and his pivotal role in founding Venero Capital Advisors. 🔹 AI’s Impact on Fundraising: We discuss how AI has evolved from predictive to generative, making it more accessible and vital for businesses. 🔹 Investor Insights: What investors look for in AI-driven companies and the importance of integrating AI to stay competitive. 🔹 Challenges in AI Evaluation: Learn about the technical complexities and the need for balanced expertise in investment decisions. 🔹 Future Predictions: AI’s role in our daily lives over the next decade, from AI-driven wearables to significant advancements in technology.

🚧 WorkTech M&A booming and VC funding recovering in 2Q 2024 💪 Investment into WorkTech grew further in 2Q 2024, with $2.5bn invested across 141 rounds. That’s a significant 32% increase quarter-on-quarter and a continuation of an uptick from the lows of Q3 2023 141 funding rounds were announced, in line with that of the last four quarters, implying a continued expansion of the the average investment size to $20.6m Consistent with the expanding average investment size, later-stage rounds saw a notable uptick. This is a positive sign for the sector overall, indicating a return of investor confidence and support for growth- stage WorkTech businesses M&A activity remained robust in 2Q 2024, with 100 transactions – second highest quarterly volume in almost two years! 👉 Stay updated with Venero's comprehensive quarterly report on WorkTech M&A and VC funding in 2Q 2024: https://lnkd.in/ejauPBrB

Have you noticed that #WorkTech M&A has been booming? Over the last two quarters we have had more than 200 acquisitions in the space – a multi-year record. What has been driving this flurry of activity? 1) The opportunity for WorkTech vendors remains huge. And acquisitions helps buyers capture a bigger share of the pie, faster 2) Valuation expectations between buyers and sellers have converged, after 2+ year adjustment period Will this trend continue? It certainly looks like it... M&A activity among WorkTech businesses has shown exceptional resilience despite the macro environment. Also, VC funding for WorkTech businesses is gradually recovering, adding another positive note to the mix. This and much more, including sector trends, valuation multiples, M&A drivers and growth outlook, in Venero's report on 2Q 2024 WorkTech M&A and Fundraising Activity. https://lnkd.in/eMXVBPZ5

We're #hiring a new German-speaking Senior Associate / Vice President, Investment Banking (M&A). Apply today or share this post with your network.

Raised $1.8B+. Last valued at $8.3B. Selling for $150M-$200M. Big troubles in unicorn land. 🦄 A lot of investors are finding out the hard way that exit markets aren’t sufficiently large enough, or active enough, to support all the money that went into tech companies in recent years, especially those with crazy high valuations. Throwback to the company I met a few weeks ago, who had raised at 25x ARR and were wondering if they can turn around and exit at the same valuation a few months later.

#WorkTech kicked off Q1 2024 with a 30% quarterly increase in VC funding, but deal volume remained flat. Last year, revenue growth for most businesses slowed materially, so what are now the expectations for the coming quarters? In this latest Venero market update we explore: ➡ What the Q1 2024 numbers mean for WorkTech ➡ What is the outlook for 2024 and 2025 ➡ How has M&A activity been developing, and ➡ What are latest valuation multiples and trends Download the full report from Venero's website. 👉 Link in the first comment #hrtechnology #futureofwork #marketupdate #corporatefinance #investmentbanking #venturecapital #funding #mergersandacquisitions

Founders, if you are not ready, please don't get sucked into a funding round simply because you get approached by an excitable VC. 🛑 Have them wait until you feel confident about running a strong fundraising process and have all your ducks in a row. Without a clear process, you can end up wasting a lot of time talking to investors and end up with a sub-optimal round. You will generally get the best combination of great investors and favourable terms (valuation/dilution) when you can generate some healthy competition. #startupadvice #fundingprocess #founders #investors #venturecapital

🤝 Both Dayforce and Freshworks are sizeable public B2B #hrtech businesses, catering to essential business needs across medium-sized and large enterprises. Yet, their solutions and valuation development differ markedly. Dayforce is an HCM suite, focusing on HR, payroll, WFM, and talent intelligence. It is a large player for mid-sized to large enterprises in North America, boasting 6,393 customers and 6.84 million users, with average revenue per customer of $239K. Freshworks offers CRM solutions for customer service and IT Service Management, with a broad reach across 67,100 customers globally. It serves SMBs, with a much larger customer base and lower average annual revenue per customer of $9.7K. On valuation, Dayforce and Freshworks paint very different pictures at first glance: 💰 Since its IPO in 2018 the market cap of Dayforce increased by 267% to $11.1bn, while Freshworks is struggling to reach its September 2021 IPO valuation of $10.1bn with a current market cap of $5.6bn. ⏳ This could be explained by the timing of the Freshworks IPO, which was during a period of peak valuations for SaaS businesses across the board. Valuations are comparable and Freshworks is even valued higher when comparing EV / Revenue, with Dayforce at 5.6x and Freshworks at 6.9x. The lower multiple for Dayforce could come as a surprise when taking into consideration profitability and recent growth of both companies: 📊 Both Dayforce and Freshworks have seen growth at roughly 20% year on year in 2023. In FY23, Dayforce achieved a net income of $54.8 million, marking a $128.2 million increase YoY. Similarly, Freshworks, although not yet profitable, reduced their net loss by nearly $100 million to $137.4 million in FY23, compared to the previous year's net loss of $232.1 million. 📈 It is even more notable, considering that Dayforce spends around 20% of revenue on Sales & Marketing, while Freshworks invests a whopping 60%. 🚀 However the framing of these growth rates could not be more different: Dayforce emphasized an average deal size increase of 22%, a retention rate of 97.1% and rising customer satisfaction NPS scores across Services and Support. 📉 Freshworks sees their 19% topline growth in FY23 as below expectations, attributable to the cautious spending of SMB customers in the current tight macro environment (buying fewer software seats, in some cases even reducing the number of seats). ❓Does the higher revenue multiple imply higher expectations for future growth and more green field opportunity for Freshworks going forward? Is it a premium for them achieving profitability much earlier in their company history given their smaller size? Happy to discuss in the comments. #futureofwork #hrtechnology #worktech #valuation #kpis