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Tech-focused PE firm expanded its investment thesis to include niche Software categories

Tech-focused PE firm expanded its investment thesis to include niche Software categories

Client’s challenge

A Tech-focused Private Equity firm was looking to develop a thesis around a particular software category and validate the investment opportunity for it.

The primary goal of the client was to create a category-based market mapping for the chosen software sector and corroborate their investment strategy. To grasp the market’s investment opportunity in terms of market size, key vendors, market fragmentation, customer sentiments, market share by geography, industry, etc., they sought to undertake in-depth market research and analysis.

The deep-dived analysis was critical to understanding the current state of the market and the pain points of the customers. The client collaborated with Zinnov to assess this market category and the customer demographics for crystallizing their investment strategy.

How Zinnov helped

In response to the client’s challenge, we started by first calculating the total market opportunity available for them. For this approach, the identification of emerging industries, the impact of COVID-19 on the sector, and the discovery of top use cases were crucial in drawing up the blueprint and the present state of the market.

The client also got deep insights into the customer sentiments on the industry, software spending, and current solutions in the market. This made it easier to get a clear grasp of what the customers needed and expected from the software sector. Additionally, it helped in shortlisting potential assets for investment as per the customer desirability.

We also identified the challenges and shortages with the current solutions available in the market and the new opportunities that they could target for investment and scalability. The focal point was to bridge the current gaps in the market by selecting assets that would fulfil customer needs optimally.

The entire detailed research included perusing multiple sources and doing simultaneous analysis from them. Some of the resources that were thoroughly analyzed were: Technology content sources such as TechCrunch, customer case studies, primary interactions with stakeholders of ISVs across functions, and primary interaction with software consumers.

Impact created

Our strategic work with the client led to the development of a detailed market landscape report on each segment which was an essential step to reaching their end goal.

We also channelled our efforts towards conducting 5-10 comprehensive customer interviews to assess the overall industry and vendors in the industry. Post our research and primary interviews, 5-10 targets were selected, and their investment worthiness was analyzed to arrive at the most suitable one.