Digital threats are constantly evolving, and cybersecurity remains a critical priority for businesses worldwide. We partner with companies developing cutting-edge security solutions that protect digital assets, ensuring business continuity and safeguarding against cyber threats.

Key theme and focus area

As traditional IT network boundaries collapse, we view the challenge of managing risks outside of the firewall – such as those posed by from third party vendors, controlling data and its use in shared and collaborative environments (including for AI training), safeguarding IP beyond the firewall, and mitigating digital threats to physical environments (OT/IoT) – as particularly topical. Given the multitude of vendors in the cybersecurity market, we emphasize those with efficient and scalable go-to-market strategies.

In addition to disruptive emerging technologies that address the ever-evolving threat landscape, we identify opportunities in creatively optimizing existing technologies for easier deployment and management. This approach enables entities to attain the highest level of protection despite limited resources – a crucial advantage, especially for SMBs with smaller budgets and IT departments, yet facing comparable threats and adversaries as larger enterprises.

Our historical focus in the Cybersecurity sector has evolved over time, adapting to the changing tactics of malicious actors and the expansion of the attack surface and threat landscape into new areas.

The e-commerce sector continues to experience explosive growth. Our focus is on technologies that enhance the online shopping experience, improve operational efficiency and drive sales growth through advanced analytics, AI and personalized customer experiences.

Key theme and focus area

Our e-commerce ptimization focus emphasizes technology companies providing the infrastructure software, applications, tools and integrations that enable a broad range of core online shopping capabilities. These offerings, while generally underappreciated by online shoppers, have to work seamlessly in the background to ensure a high-quality user experience.

The proportion of goods purchased online rather than at physical retail stores has been steadily increasing over the past decade and intensified during the pandemic. This shift is driven by greater product selection and availability, automation, more competitive pricing, increasing consumer trust and greater convenience — especially now that expedited shipping is the norm. The trend has benefited not only retailers and sellers who have opened online stores but also technology vendors across multiple disciplines that enable online selling and fulfillment activities. It will continue to benefit technology vendors as the shift proceeds, particularly since online sellers must continually invest in e-commerce technologies to ensure efficient operations and remain competitive as the industry evolves.

Our history in the e-commerce sector has broadened from e-commerce platforms and middleware to encompass point solutions, platform plug-ins and other add-on tools. We observed that such offerings evolve and innovate faster, are best-of-breed in their respective categories and create more lasting value for businesses.

Tools and platforms that enhance enterprise productivity are pivotal in a digital-first world. We seek out innovations that automate processes, facilitate collaboration and empower businesses to operate more efficiently and effectively.

Key theme and focus area

Our work in Enterprise Productivity focuses on tech companies that use automation and analyze data to achieve more efficient operations and enhanced asset performance.

In many industries, businesses rely on manual processes or outdated metrics to manage assets, whether those assets be a loan portfolio, large real estate portfolio, or investment holdings. By using technology, these firms can achieve greater financial performance and simultaneously lower risk.

Our research has focused on high value-added technologies that are aided by macroeconomic tailwinds.

The way we work is changing rapidly. We’re interested in technologies that redefine where, how and when work is done, including workforce management and optimization as well as talent acquisition, development, and management platforms.

Key theme and focus area

Our Future of work focus encompasses tech companies that enable employers, individuals and the broader society to optimize their returns on investments in people.

In many industries, the investment employers make in their workforce often represents their most significant expense. However, the use of technology to enhance these investments lags behind other operational areas. In particular with the broad advent of AI, we believe significant value will be created through technologies designed to personalize and enhance the development and management of people.

Our history in the education sector broadened to encompass the Future of Work sector as we saw opportunities to drive value through new technologies that create lasting returns for individuals and society at large.

We recognize the transformative impact of innovative go-to-market (GTM) technologies on businesses’ ability to scale and adapt. Our focus is on companies leading the way in increasing customer lifetime value, accelerating revenue, growth and enhancing customer engagement.

Key theme and focus area

GTM technologies enable leaders in B2B marketing, sales, customer support and success, account management, and operations accelerate revenue growth, boost customer acquisition efficiency, improve customer retention and satisfaction, and integrate end-to-end revenue operations for scalable, profitable growth.

Several trends are reshaping the landscape of GTM strategies. Shifting social behaviors and new technologies are changing the way buyers make purchases. Increasingly complex GTM strategies magnify the importance of eliminating the silos among GTM personnel, processes and technologies. Furthermore, as competition for customers and talent intensifies, the necessity of investing in the right technologies grows ever more critical.

GTM technology sits at the intersection of our long-standing sectors of Future of Work and e-commerce optimization. Our expertise in Future of Work informs our approach to sales onboarding, training, and enablement. In e-commerce optimization, we focus on technologies that help B2C companies maximize customer value. Similarly, GTM technology offers an analogous value proposition for B2B companies.

The healthcare sector’s digital transformation presents immense opportunities for innovation. We focus on IT solutions that improve patient care, streamline healthcare operations and enable better health outcomes through data analytics, telehealth and personalized medicine.

Subcategories within the broader sector:

Provider: Revenue cycle management, patient engagement, population health, heath information management, governance, risk & compliance, and supply chain & logistics.

Payer: Distribution, member, provider and network management; care and utilization management; quality and revenue operations; and value based care.

Healthcare expenditures already consume more tha 17% of Gross Domestic Product in the Unitd States. This will increase as the nation continues to age (the “Silver Tsunami”) and as we continue to see an increasing demand for healthcare services. Combine this with the government’s interest in payment models that better align costs with outcomes, and we see an expanded need for technology-based solutions that improve system efficiency and control costs. We can also expect these realities to involve individuals more fully in the navigation and decision-making around their healthcare choices. This will create continued opportunity for innovation, as the collective healthcare industry lags other sectors in terms of “consumer friendliness”.

Robust digital infrastructure is the backbone of the modern economy. We’re interested in technologies that strengthen connectivity, data storage and security, ensuring businesses can operate efficiently and scale effectively.

Key theme and focus area

Our focus is on technologies that enchance the capacity and quality of existing infrastructure through application of little-to-no net capital upgrades. The high tech physical and information elements enable the provision of goods and services vital to enhancing living conditions while minimizing negative environmental and economic effects.

It’s a simple supply-and-demand equation. As the population continues to grow and resources become depleted, technological productivity is the only way to maintain or improve global conditions. By advancing technology and increasing efficiency, we can optimize resource use, develop sustainable alternatives, and meet the needs of a growing population without compromising future generations.

FA was founded on an environmental investing foundation and has evolved alongside the shift towards green, clean and sustainable technology. As such, we have unmatched institutional knowledge of what it takes to succeed in this arena.

The IoT sector is rapidly expanding, connecting devices and systems in ways that unlock new efficiencies and capabilities. We research companies that are leading the charge in creating interconnected, smart environments.

Key theme and focus area

Our Internet of Things focus encompasses technology companies, including standalone hardware, platform and application software vendors as well as full, end-to-end solutions providers, that enable the capture and analysis of data from distributed assets and environments, thereby driving significant values to the businesses deploying the technology through the visibility and insights afforded which impact operations and decision making.

Most businesses have assets and environments that can be remotely monitored and controlled. IoT solutions capture sensor data and convert it into actionable insights—often in real time—that can reduce costs, optimize operations, enhance decision-making, boost performance and productivity, and improve safety. As organizations increasingly rely on data, remote visibility is becoming a standard expectation.

The potential for IoT disruption and growth is significant, given the vast number of assets that can be connected compared to the small fraction already online. Several factors are accelerating adoption: substantial declines in hardware and data connectivity costs, widespread high-quality cellular networks, the emergence of alternative networks, advancements in AI and edge computing, and labor inflation and shortages.

We have a long history in the telecommunications sector. Initially focused on call center services and billing software, we shifted our focus entirely to the Internet of Things (then known as Machine-to-Machine). We recognized IoT’s significantly larger addressable market across all vertical markets and its compelling adoption drivers, including strong and lasting returns for businesses adopting the technology. We expected IoT to present us with many more opportunities to drive value relative to our legacy focus.

Innovations in learning technology are transforming education and professional development. We back solutions that make learning more accessible, effective and personalized.

Technology is playing an increasingly significant role in the pharmaceutical industry, from drug discovery to patient engagement. We are interested in IT solutions that accelerate pharmaceutical research, improve clinical trials and enhance drug delivery and patient care.

Key theme and focus area

The Pharma industry is experiencing a digital transformation. The emergence of specialty therapeutics, increased regulatory constraints and the focus on subgroups in various therapeutic areas has led to an explosion of information. What unites these concepts are digital technologies. Digital technologies provide the ability to rapidly and easily collect, store, analyze and transmit data on a large scale, unlocking huge potential in drug discovery, clinical development, commercialization, value-based care and patient safety.

Pharma IT refers to the use of technology and information systems to support various functions within the pharmaceutical industry. This includes research and development, manufacturing, regulatory compliance, supply chain management, as well as marketing and commercialization. Additionally, Pharma IT plays a crucial role in ensuring compliance with industry regulations, such as those imposed by the FDA and EMA, by maintaining accurate records and facilitating audits.

Our Pharma IT focus encompasses tech companies that enable pharma companies to improve productivity, ensure regulatory adherence, and drive innovation from drug discovery through to commercialization.

Software as a Service (SaaS) tailored to specific industries offers unique value propositions by addressing niche market needs. We research vertical SaaS solutions that solve industry-specific challenges, driving efficiency and innovation.

Key theme and focus area

In addition to healthcare which we class separately, several verticals are large enough to justify application development specific to the sector. They also have needs that differ from more generally available solutions. The applications generally handle workflow that is specific to an industry.

There are several examples of publicly traded companies in the financial, insurance, government, legal, real estate, restaurant, home service, and automotive and trucking verticals. There are other verticals that are large enough to support private companies but may not be large enough to support a stand alone public company.

In industries with many small to medium sized companies, it is difficult for one company to develop and maintain their own custom sosftware platform. An external software company with good knowledge of industry requirements has the ability to enhance productivity for many players with a well designed and easy to use SaaS offering.

First Analysis has made several private investments in vertical SaaS applications so we have an appreciation of the level of differentiation from multi-industry applications required for success.