Contextual Communications Overview

Contextual Communications Overview

The communications software market is undergoing a dramatic shift from legacy hardware- and network-centric systems to more efficient cloud-based tools that enable businesses to have more meaningful and informed contextual conversations with their customers.

Catalyst has seen this first-hand through its investment in Weave (recently named to the 2019 Forbes Cloud 100). For example, a common phone call between a dentist office using Weave and their patient has been transformed from “while I have you on the phone, is there anyone else in your family that needs an appointment?” to “while I have you on the phone, I see your children haven’t had appointments in over a year – should we get them scheduled next month as well?”

AI Enablement of Business Services Overview

As outsourced business services become more commonplace and companies continue to search for ways to reduce costs and increase efficiency, we believe third-party applications that leverage AI and offer it “as a service” will become crucial to operations. Businesses that embed AI technologies will have a pronounced competitive advantage over their competitors, improving their services (taking market share and increasing revenue) and automating tasks (reducing costs). While traditional service businesses do not have the technical expertise to develop proprietary AI and ML programs, they will, however, be able to outsource the function, quickly plugging-in the capability and realizing immediate benefits. The application of AI to traditional business services is widespread and will have an impact in accounting services, third-party logistics, contact centers / sales organizations, property management and many other verticals and departments.

Restaurant Tech Overview

Restaurants in 2019 continue to face several challenges, including everything from attracting and retaining customers to hiring and training staff. These challenges, both customer-facing (“Front of House”) and operations-focused (“Back of House”), keep restaurant profit margins low at 6% and contribute to the industry’s high failure rate. Increasingly, restaurants are more attune to these pain points and seek out restaurant-focused software and tech-enabled outsourcing solutions to increase sales volumes and reduce costs.

Welcoming EnterpriseDB to the Portfolio

The cloud has a history of systematically entering entrenched markets and upending them, displacing legacy providers as they fail to compete on ease of use, flexibility, scalability, and pricing. Compute and storage experienced this very cloud disruption over the past decade as Amazon, Google, and Microsoft have released and continued to improve on their public cloud offerings. Companies like IBM, Dell, and HP have struggled to maintain pace with the constantly innovating and iterating public cloud providers.

Construction Tech Market Overview

Despite a recent uptick in private financing and M&A activity, the construction industry remains a laggard in terms of technology adoption.  A number of platforms and point solutions have emerged and are bringing traditionally paper-based processes online, but much innovation remains to come.  Many stakeholders stand to benefit from the digitization of construction workflows, including contractors, designers, suppliers and other service organizations.  As these transformations occur, truly vertically integrated platforms will emerge.

GovTech Market Overview

In a day and age of rapid technological innovation, the public has come to demand an incredibly high level of technical sophistication from all aspects of their lives. Where the commercial sector has accelerated to meet this demand, the public sector has historically been resistant to change. The Government Technology (“GovTech”) sector arose in response to public demand for more efficient, affordable, and secure government processes from a segment plagued by antiquated systems and outdated procedures. Only recently have government entities begun leveraging innovative and agile solutions to meet increasing operational demands and produce more citizen value while remaining adherent to stringent budgets.

Game Notes from My Rookie Year at SaaStr Annual

Catalyst has been investing in SaaS since before the term was coined (we funded MessageLabs, an enterprise email security SaaS offering, in 2000). Since then, we have invested in several other growth stage SaaS businesses, including MINDBODY (NASDAQ:MB, business management software for health and wellness studios), Ascentis (human resources management software), Jobvite (social recruiting software), and Conductor (content intelligence software for marketers), among others. Over the years, we have shared our views on how the SaaS space is evolving, including a research piece (SaaS Investors: Mind the Valuation GAP (Growth at Any Price)) that introduced our proprietary equation for valuing SaaS companies.

How to Value SaaS Companies

Software-as-a-service (SaaS) companies have had a great run over the course of the current business cycle. The sector has routinely traded at a multiple above five times revenue, even while having low or negative profit margins. From 2010 to 2013, market observers posited that valuation multiples in the sector were driven by growth alone – the faster the better – no matter how much cash burn it takes to achieve. Since the public market for software stocks hit a speed bump starting back in Q1 of 2014, however, there has been a general perception that profitability is becoming more of a factor in driving SaaS valuations. This awareness is driving capital allocation discussions at companies across the SaaS sector, both public and private. Should a company raise money to “keep its foot on the gas?” Or should it perhaps slow growth a bit but make the move to “EBITDA-positive?”

AltAssets profiles Catalyst Investors

Catalyst Investors was founded in 2000 in New York by three ex-bankers keen, in managing partner Brian Rich’s words, to “start our own thing”.
But it was years before their particular type of private equity investing had a name, he says.

Laudable Logistics: Simplified Shipping for Consumers & SMBs

Convenience, pricing and reliability are critical for shipping services to gain traction, and these innovative consumer- and SMB-centric shipping solutions bring logistics and supply chain management (SCM) to the mainstream. Similarly, last holiday season we looked at SCM through the lens of a consumer in our blogpost about the importance of having efficient SCM systems to ensure that gift purchases arrived on time and in the correct size. We have continued to research the B2B SCM software sector, and we created a [supply chain management cloud-based challengers market map] [link to market map] and [research report] [link to memo] to highlight the key trends.