Softwaresector update Q3 2022Important disclosures appear at the end of this reportGP Bullhound Corporate Finance Ltd and GP Bullhound Asset Management Limited are authorised and regulated by the Financial Conduct Authority GP Bullhound Inc is a member of FINRAGP Bullhound Hong Kong Limited is authorised and regulated by the Securities & Futures Commission GP Bullhound Luxembourg Sàrl is authorised as an AIFM in Luxembourg by the Commission de Surveillance du Secteur FinancierQualitative insights into broader Software trends and public and private valuations across the transaction spectrum, and interviews with today’s leaders transforming the sector.
2TakeawaysTHE VIEWQ3 Software Perspectives from GP BullhoundTakeaways▪ API services have become more valuable as enterprise solutions grow▪ Surging volume and complexity of APIs have increased cybersecurity obstacles ▪ API-centric security solutions are gaining rapid customer adoption API-CENTRIC SECURITY SOLUTIONS▪ Machine Learning (ML) is starting to play a larger role in the SaaS space ▪ As its role expands, MLaaS will be essential for AI based SaaS businesses ▪ Large players in the space are integrating MLaaS into their current cloud offeringsTHE EVOLUTION OF MLAAS▪ More vertical SaaS solutions are appearing to serve specific use cases▪ The rise in popularity is driven by the cost savings Vertical SaaS offers businesses▪ Vertical SaaS leads to more efficient integration, lower CAC, and higher ROI CONTINUED RISE OF VERTICAL SAAS▪ Chatbots are becoming increasingly popular among businesses and consumers▪ The main driver of growth is the adoption of 24/7 customer support▪ The Chatbot ecosystem continues to develop and scaleCHATBOTS ENTER CENTRE-STAGE ▪ Earned Wages Access (EWA) companies remove the gap between work and pay▪ EWA adoption is being driven by a tight job market and shrinking workforce▪ Fintech companies are partnering with financial institutions to enter the spaceEWA COMPANIES TO ALTER CURRENT FINANCIAL SYSTEM
3Current software perspectives from GP BullhoundGP BULLHOUND’S SECTOR TAKEAWAYS Sources: Drift, Markets and Markets, Juniper Research, Business Insider, KPMG, American Banker (as of 30 September2022)TakeawaysChatbots enter centre-stage ▪With messaging apps on the rise, chatbots are increasing in popularity among businesses and consumers alike. Chatbots are artificial intelligence systems that enable customer engagement via messaging, text, or speech▪Popularity of chatbots is mainly driven by increasing demand for 24/7 customer support at a lower operational cost. There are continued initiatives to develop self-learning chatbots to deliver a more human-like conversational experience▪The chatbot ecosystem is quickly expanding despite the relatively robust space that currently exists, with examples being companies such as atSpoke, Drift, and Netomi. The underlying technology and platf...
