Battery Ventures has been investing in technology driven companies for more than 25 years and manages over $4 billion in funding. Headquartered in Waltham, MA, some of their prominent investments include Akamai, Infoseek, Nextel and Vastera to name a few.
SAAS and Internet Show Promise :
Battery Ventures is a big believer in the rapid acceleration of growth in SaaS. SaaS has definitely been ahead of the curve. The idea has been around marketing technologies for a while and now there are more than a dozen technologies that help the digital marketer take advantage of the shift from online to offline marketing. Battery has potential IPO candidates such as Markedo and Neolane to name a few.
The other area that shows promise for investing is flash datacenters. The firm has had good success in funding companies such as Nutanix in this sector. The other major trend is the Internet. From a consumer perspective Internet continues to capture more mindshare and economic activity. Battery also considers next generation models as high potential success stories, some of the examples being Glassdoor and Wayfair.com. An undisclosed company funded by Battery in Boston has already amassed over half a million in revenue.
Technological trends driving the market:
Battery Ventures believes the biggest drivers are currently mobile. Mobile is accelerating the internet adoption curve both in the developed and developing countries. The capital is currently helping out Continuity, a Big-Data stealth mode start-up; Platfora, a Business Intelligence and Analytics platform provider. The two startups are taking advantage of a new software framework called ‘Hadoop’ that supports data-intensive distributed applications under a free license.
With a focus on software and internet, VC’s constantly look for innovation at multiple layers. In the infrastructural layer, the cost of memory is cheap and thus allows movement of activities from older to newer and easier methods. This migration drastically changes the performance dynamic.
The Impact of Katrina on the Global Investment Scenario:
The question to be asked is how much of investments of the company are in Macro and how much are in Micro. There were many companies that were growing at a drastic rate when the recession hit in 2008. The true worth of a company is in a good value proposition and return of investment. However a bad Macro environment usually invests poorly in experimental areas. But a good product offering can do wonders in any environment.
Battery Ventures has being doing well in the past 24 months in the macro environments. But the firm feels finding great innovation is of utmost importance and hence strives to make the invested companies top players in their respective verticals.
2013- The Elephants in the Room:
In the software markets, the public investors are concerned about growth. There are a few companies growing at the rate of Workday, which recently went IPO. The belief is that it’s a large market and will continue to grow fast for many years to come. It is important to note that in consumer markets companies tend to be valued more on their actual revenue and profits as it is difficult for an acquirer to buy a consumer company and upgrade the firm’s business. Software trains in a different way than consumer companies do. SaaS is a very beautiful predictable model that the public companies have begun to appreciate and prefer over the old model.
Markedo is a promising candidate in 2013.The next year will feature a very good IPO market. The key indicators of a good IPO are how individuals rate the volatility index. A low index is considered as a good segment. Software is already 50 percent of the IPO industry. 2013 will see startups around the theme of Big Data, mobile, SaaS and the cloud.
Startups are not High Risk Investments:
Individuals view startups as a risky field. However it is exactly the opposite. Smart entrepreneurs are good at deciding what the market needs and build very specific products. The current environment is the easiest for entrepreneurs to raise capital, but it is important to do the homework right, specifically laying focus on customer target, pain points and hard decision making on investment of hard earned cash.