This market research report was originally published at Woodside Capital Partners’ website. It is reprinted here with the permission of Woodside Capital Partners.
Seasons Greetings from Woodside Capital Partners! Below is our much anticipated 2022 Tech Finance Look Forward. It’s a 3-5 minute read. Wishing you and yours Happy Holidays and a prosperous New Year!
– Andrew, George, Jon, Jordi, Katie, Kelly, Mark, Michael, Mukesh, Nishant, Ron, Rudy, Ryan, Sam, Shing, Sumida, Tchad, Thomas
– The Partners at WCP
Kelly Porter – Lead Managing Partner – The record-shattering performance of tech finance in 2021 is expected to continue into 2022. We believe that venture investors will continue to pour capital into start-ups at an accelerated pace, having invested over $100B into private companies during each of the last two quarters of 2021 alone. To put into perspective how big this actually is, only three years ago in 2018, total venture investing for the year eclipsed $100B (and at the time, that was huge news). In addition, recently-formed PE firms seeking to invest in technology have mushroomed, and existing PE firms have raised ever-larger funds and increasingly targeted technology opportunities. With $1.3 Trillion in new capital raised in 2021, PE firms now have an estimated $3.3 Trillion in funds to invest. More capital, a steady increase in the number of unicorns, a rich IPO and M&A exit environment, and highly-valued public companies – all are continuing to result in fantastic valuation step-ups between rounds – with the median hitting 2.0x last quarter. The current exit environment is the best in history, and is also expected to continue – with median valuation for VC exits at $950M for public listings and $150M for acquisitions. Key potential risks that could temper the current financing/liquidity opportunity for companies include: a significant public market correction; increased regulation on tech monopolies; increasing inflation and interest rates; a resurgent pandemic; more severe supply chain disruptions; and/or an even greater meltdown in the relationship between the US and China. We are in a boom – barring a Black Swan event, we expect the overall tech innovation industry growth to continue well into 2022, as VC firms are awash in capital having raised $86B and $96B in 2020 and 2021 YTD, respectively.
2022 Sector Summaries:
Rudy Burger – Managing Partner – Computer Vision – The global computer vision market is valued at around USD $12 billion in 2021. Year to date there have been 34 M&A transactions involving computer vision companies with an aggregate value of $4.1B. Recent advancements in computer vision have broadened the market to include automotive, education, healthcare, robotics, consumer electronics, retail, manufacturing, and security & surveillance. The popularity of computer vision – especially for facial recognition and automatic image tagging – has already drawn increasing regulatory attention from privacy experts and data governance teams. Data supply chains fed by, and created for, computer vision will be closely scrutinized for security, safety, liability and quality metrics. A supporting marketplace to build, test, ensure transparency and prove ethical data supply chains has started to gain significant momentum. This trend will accelerate through and beyond 2022.
The remainder of Woodside Capital Partner’s report, covering other sector summaries, can be found here.
About Woodside Capital Partners
Woodside Capital Partners is the leading corporate finance advisory firm for tech companies in M&A and financings in the $30M-$500M segment. The firm has worked with the best entrepreneurs and investors since 2001, providing ultra- personalized service to select clients. Our team has global vision and reach, and has completed hundreds of successful engagements. We have deep industry knowledge and extensive domain experience in the following sectors: Autonomous Vehicles and ADAS, Computer Vision, Artificial Intelligence, Cloud/Enterprise Software, Cybersecurity, Digital Entertainment & Lifestyle, Health Tech, Internet of Things, Marketing Technology, Networking / Infrastructure, and Robotics. Woodside Capital Partners is a specialist in cross-border transactions, with extensive relationships among venture capitalists, private equity investors, and corporate executives from global 1000 companies. More about Woodside Capital Partners here.