Latest news with #Bain&Co.
Techday NZ
20-05-2025
- Business
- Techday NZ
Market expansion & global reach drive billion-dollar software growth
New research from Bain & Co. has examined the business strategies that distinguish software companies surpassing an annual recurring revenue of USD $1 billion. The analysis reviewed 600 software firms with annual revenues of over USD $100 million, with particular attention to the 26% that have reached or exceeded USD $1 billion a year. Rather than focusing on the creation of entirely new markets or disruptive strategies, the report concluded that most companies in this bracket achieved growth by substantially expanding the total addressable market for their products. The findings indicate that this approach to market expansion is more prevalent among billion-dollar revenue companies than other high-growth strategies often cited in the sector. The report showed that around 80% of software companies generating between USD $1 billion and USD $3 billion in annual revenue now offer at least two distinct major products. This diversification of product lines suggests that companies seeking to scale revenues frequently move beyond a single offering to capture broader customer needs within and across market segments. Additionally, the research highlighted a significant trend among Software as a Service (SaaS) firms that initially targeted one specific industry. Almost all such firms that reached the USD $1 billion revenue mark have since expanded their operations into sectors beyond their original core vertical. The study also noted the importance of international growth. Of the group of about 90 USD $1 billion-plus software firms analysed, more than two-thirds are generating at least 30% of their revenue from regions outside their primary market. This points to the role of globalisation in achieving scale, as companies reaching the highest revenue brackets tend to establish a presence or customer base in multiple geographic regions. Reflecting on the findings, the press release stated: "Of those software firms who have achieved $1 billion in annual revenue, most have done so by expanding their total addressable market (TAM) - not by creating a new market or chasing disruption." The report further added: "Around 80% of software companies with $1 billion to $3 billion in annual revenue sell at least two different major products." It was also highlighted: "Almost all $1 billion SaaS firms that initially focused on a single industry have since expanded beyond their core vertical." Finally, the press release noted: "Of the group of about 90 $1B+ software firms that Bain & Co. analysed, more than two-thirds generate at least 30% of their revenue from outside of their primary region." The research suggests that expansion of product portfolios, diversification into new industries, and international market reach are significant factors for software firms aiming to progress from the USD $100 million tier to annual recurring revenues of USD $1 billion or more. Follow us on: Share on:
Arab News
17-04-2025
- Business
- Arab News
Bain & Co. chooses Riyadh for regional HQ amid Saudi business push
RIYADH: US-based management consulting firm Bain & Co. has announced the opening of its new regional headquarters in Riyadh, as the Kingdom's capital continues to attract top global firms. The new office, located in the King Abdullah Financial District, marks Bain's third location in the Saudi capital and more than doubles the size of its previous space, the company said in a statement. Bain's move comes amid a broader wave of multinational companies establishing regional bases in the Kingdom, with nearly 600 international firms having set up regional headquarters in Saudi Arabia since 2021, including Northern Trust, Bechtel, PepsiCo, IHG Hotels & Resorts, PwC, and Deloitte, the Saudi Press Agency reported in March. Ahmed Boshnak, partner and head of Bain & Co.'s Riyadh office, said: 'This investment is a natural next step on our journey in Saudi Arabia. It's a reflection of the trust our clients have placed in us, the incredible talent we've been able to build, and our continued optimism about the market's future.' Riyadh's regional headquarters program offers incentives such as a 30-year corporate income tax exemption and withholding tax relief, alongside regulatory support for multinationals operating in the Kingdom. He added: 'Being in KAFD puts us closer to many of our clients, and the new space gives our team the right environment to collaborate, grow, and continue delivering meaningful results.' Bain has served clients in the Middle East since 1990 and established its first regional office in the region in 2007. The firm's new headquarters reflects a long-term investment in both local talent and Saudi Arabia's economic transformation efforts. 'This milestone is about investing where it matters most: enabling us to be closer to and better serve our clients from the latest infrastructure in the heart of Riyadh,' said Tom De Waele, Middle East managing partner at Bain & Co. 'We're grateful for the partnerships we've built in the market and are excited about what lies ahead,' he added. Founded in 1973, Bain & Co. has offices in 65 cities across 40 countries. It advises clients across various industries and has committed over $1 billion to pro bono work over the past decade. The expansion underscores Saudi Arabia's growing appeal as a strategic base for global firms looking to tap into regional opportunities, as the Kingdom advances its Vision 2030 economic diversification strategy.
Axios
15-04-2025
- Business
- Axios
Robot co-workers are coming, AI leaders predict
Last week, I moderated a discussion about embracing AI in the workplace at the Phoenix Global Forum. Why it matters: The panelists — Kellie Romack (chief digital information officer at ServiceNow), Anne Hoecker (head of technology and cloud services at Bain & Co.) and Kristin Emery (state and local government affairs director at Microsoft) — are working at the cutting edge of AI adoption and provided a fascinating look at how companies will evolve in the coming years to take advantage of this ever-improving technology. Zoom in: Here are the most interesting things I learned: 1. AI is already paying dividends — when used smartly. Companies that are serious about using AI to heighten productivity are seeing ROI of hundreds of millions of dollars, Romack said. ServiceNow, a software company that deploys AI in workplace systems, has used its software internally to garner $350 million in productivity annually, she said. Romack cited an example of a process her sales team uses to track compensation. What once took four days to compute has been brought down to eight seconds with AI. The other side: Hoecker, who reported similar success, said companies that are not seeing an ROI are often piloting a lot of AI uses but failing to scale, leaving them with "micro-productivity" — a lot of people saving a little bit of time. AI is not a magic wand — it's a tool that requires an entire business transformation and embrace to reap real benefits, she said. Otherwise, they'll be stuck with a few cool pilots but no major cost or time savings. 2. Ethical adoption requires business and government buy-in. Governmental agencies and businesses should work in lockstep to ensure ethical AI deployment that doesn't stifle innovation, the panelists agreed. State of play: More than 700 AI-related bills have been introduced nationwide just this year, Emery said. They range from installing punishments for deepfakes to requiring transparency disclosures. Between the lines: All three panelists noted that the businesses seeing the most benefit from AI are proactively implementing guardrails to ensure responsible AI use and compliance with national and international standards. What they're saying: Emery said AI laws must strike a balance of protecting privacy, ensuring transparency and allowing businesses room to innovate. "My fear that keeps me up at night is that sometimes legislation is passed too quickly without the input or the thoughtfulness that we need to protect consumers," she said. 3. The future is robots. While most of us are still embracing generative AI (like ChatGPT), Romack and Hoecker said agentic AI (systems designed to make decisions and achieve specific outcomes without human direction) will be the next big thing over the next 12-18 months. This could look like virtual assistants, fully autonomous sales or customer service agents and manufacturing robots with high-level decision-making capacities. "Pretty soon on your team you're going to have people and [digital] agents that you work with alongside each other," Hoecker said. The intrigue: Agentic AI isn't just coming to our workplaces. "We're going to have robots cleaning your house in the next three years," Romack said.
Reuters
13-03-2025
- Business
- Reuters
Buyout barons risk choking on their stuck assets
LONDON, March 13 (Reuters Breakingviews) - Private equity managers have a bad case of indigestion. Blackstone (BX.N), opens new tab, KKR (KKR.N), opens new tab, CVC Capital Partners ( opens new tab and their peers are collectively sitting on $3 trillion of unsold assets, tying up cash that can't be put back to work elsewhere. Optimistic buyout barons reckon it's just a matter of time before a deal resurgence clears out the backlog. Unfortunately, it may have become too large to dislodge. The industry relies on constant motion. Big investors that back traditional buyout funds, like pension plans or college endowments, aim to tie up only a certain amount of their money in private equity. If old funds aren't selling assets and thus returning cash to backers, those investors may struggle to invest in new vintages. This cycle is indeed sputtering. In 2024, private equity firms offloaded $468 billion worth of companies, with the $18 billion sale, opens new tab of SRS Distribution to Home Depot (HD.N), opens new tab by Berkshire Partners and Leonard Green ranking among the largest individual transactions. That beats 2023's doldrums, but is 15% below the previous five-year annual average, according to Dealogic and Bain & Co. data. Unsurprisingly, fresh fundraising of $401 billion last year was down by a quarter from 2023, judging by numbers from Bain and Preqin. The hope was that 2025 would be more active. Surging equity markets in the wake of Donald Trump's presidential election victory seemed to set the stage for big initial public offerings, like the possible $50 billion debut of Blackstone, Carlyle and Hellman & Friedman's Medline, or Bain Capital and Cinven's German drugmaker Stada. Instead, trade-war uncertainty and a slowing U.S. economy are now ravaging confidence. Markets have plunged, opens new tab, spelling trouble for IPOs and M&A. Worse, even a good year may not make a dent. Assume that exits could rebound to $600 billion annually, halfway between the blockbuster 2021 and torrid 2023. At that pace, it would take over five years to work through the industry's current asset pile, before even factoring new investments. Little wonder that the median buyout-backed company has now been held for 6.1 years, Bain & Co. reckons. A rule of thumb is that firms try to flip assets within three to five years. Not all exits are equally helpful, either. There are three broad ways to offload a business: find a corporate buyer, list it on public markets, or sell it to a rival private equity firm. Only the first two options inject fresh cash into the system. So-called 'secondary buyouts' risk just shifting it between one set of straining fund investors and another. Such deals are nonetheless on the rise because private equity portfolios are outgrowing the rest of the financial system's ability to absorb them. The value of unsold assets has more than doubled since 2019, according to Preqin. Global M&A and equity issuance, meanwhile, shows no clear upward trend. In the five years before the pandemic, the volume of buyout-backed IPOs and sales to corporate acquirers equated to about one-third of the industry's total portfolio value. The average since 2020 has dropped to less than a fifth, according to Breakingviews calculations using data from Bain & Co. and Dealogic. If stuck assets are the new normal, the industry will look very different to the one pioneered by titans like Blackstone's Steve Schwarzman and KKR's Henry Kravis decades ago. Rather than sprucing up businesses and selling them after a few years, like EQT ( opens new tab did with $26 billion skincare specialist Galderma and Schwarzman's firm did with financial data group Refinitiv, buyout barons will have to stay invested for much longer. Delayed paydays imply lower returns on an annualized basis, as well as less frequent dollops of carried interest, or the 20% of fund profits that typically flow to private equity managers. Dealmakers will have to focus more on acquiring companies that have the capacity to grow steadily for decades, like Norwegian software seller Visma. Technology specialist Hg first invested in 2006, and in late 2023 brought in new backers at a $21 billion valuation. The other key consequence would be that traditional investors' cash crunch will persist, threatening fundraising further. The solution, for managers at least, may involve turning to a new model. Public shareholders in listed private-capital firms like KKR and Blackstone already discount lumpy lucre from asset sales, instead prizing steady, recurring fees from managing investments. As an example, analysts at Morgan Stanley (MS.N), opens new tab now base their valuation of Blackstone entirely on its fee-related earnings. This implies that managers are better off cultivating more staid funds with no set expiration date that charge rich management fees. Vehicles targeting wealthy individuals, like KKR's K-Prime or Blackstone's BXPE, particularly fit the bill, and favor the biggest firms that have the capacity to invest in marketing and grab financial advisors' attention. Over time, these vehicles could grow big enough to scoop up many of the stuck assets from older funds. But that's a distant prospect for most, and a very difficult task for smaller shops. Buyout barons will be stuck chewing over their current problems for a while.
Arab News
08-02-2025
- Business
- Arab News
Saudi's sports ambitions are fueling economic growth
RIYADH: From Formula One to boxing, golf to the FIFA World Cup, Saudi Arabia is rapidly establishing itself as a global sports hub. But beyond hosting world-class events, the Kingdom's push is a key pillar of Vision 2030, its economic diversification strategy. Saudi Arabia has secured hosting rights for major sporting events — including motorsports, tennis, and golf's LIV Tour — aiming to boost tourism, create business opportunities, and generate revenue from ticket sales, sponsorships, and broadcasting rights. Peter Daire, senior executive advisor of sports at PwC Middle East, highlighted the Kingdom's long-term vision for sports as a major economic driver. 'According to our Global Sports Survey 2023, the Middle East sports sector, including Saudi Arabia, is expected to generate substantial economic value, with Saudi's sports economy predicted to contribute up to $5.9 billion by 2030,' he said. 'This growth is driven by ongoing infrastructure projects and the expansion of world-class facilities across the Kingdom. Additionally, events like Formula E, the Saudi International Golf Tournament, Esports investments, and high-profile football matches in the Saudi Pro League have been a leading factor in attracting global attention and investment, further boosting the tourism and hospitality sectors,' Daire added. Jurg Kronenberg, management consultant at Bain & Co., noted that Saudi Arabia aims to generate 1.5 percent of its non-oil gross domestic product from sports by 2030, creating over 140,000 jobs. 'Achieving this growth will require both infrastructure investments — such as World Cup stadiums, mass sports facilities — as well as sector activation, through privatization and professionalization of sports, new leagues and competitions, creation of local IP,' he said. 'Sports has a unique potential to be the catalyst of societal and economic change in KSA and to support the development of a vibrant economy,' Kronenberg added. Daire emphasized that the government has prioritized the private sector's involvement to foster a vibrant ecosystem for sports business. 'Partnerships with European football clubs and players have helped position Saudi Arabia as a central player in the international sports landscape. 'In addition to this, developing local talent within the Kingdom, and ensuring a long-term legacy of Saudi sport business expertise is of key importance for the sector,' Daire said. He noted that integrating cutting-edge technologies — such as AI, data analytics, and digital media — into sports management and fan engagement is driving growth across multiple industries. Mega infrastructure and investments Kronenberg pointed out that Saudi Arabia's sports strategy includes landmark projects like the 11 state-of-the-art stadiums planned for FIFA World Cup 2034 and Riyadh's 135-km Sports Boulevard. Beyond high-profile venues, large-scale infrastructure projects are being developed to encourage mass sports participation, alongside financial incentives to professionalize clubs. 'In football, a bold privatization initiative is underway, transitioning historically state-owned clubs to private ownership,' Kronenberg said. 'Beyond football, Saudi Arabia is cultivating a diversified sports ecosystem, investing into the professionalization of several existing sports and supporting emerging disciplines,' he added. Kronenberg said this approach is accelerating economic diversification by creating new revenue streams, investment opportunities, and valuable intellectual property. Federico Pienovi, chief business officer and CEO for APAC and MENA at Globant, highlighted Saudi Arabia's strategic investment of over $2 billion into sports infrastructure, events, and global partnerships. 'With major events like the Asian Games and FIFA World Cup 2034 on the horizon, the Saudi government is shaping a multi-billion-dollar sports ecosystem primed for growth,' Pienovi said. He explained that Saudi Arabia's giga-projects, including Qiddiya Entertainment City, are fertile ground to combine advanced tech with the passion for sports, making the Kingdom a world-class destination. Shahid Khan, partner and global head of media, entertainment, sports, and culture at Arthur D. Little, emphasized that signing global stars like Cristiano Ronaldo and Karim Benzema has boosted the Saudi Pro League's international profile, attracting sponsors and increasing viewership. 'Developing league infrastructure and operations supports the league's competitive edge and market value. These investments increase tourism, promote national pride, and inspire local talent to pursue professional football careers,' he said. Khan added that these efforts integrate Saudi Arabia more deeply into the global football ecosystem, generating revenue from broadcasting and sponsorships. Ivan Shapochkin, a principal at Oliver Wyman's Dubai office, pointed out that with the global sports industry expected to near $1 trillion by 2030, Saudi Arabia is aligning its sports vision with future-ready strategies. 'By quadrupling its sports economy by 2030, with private sector contributions driving at least 25 percent, Saudi Arabia is reaping direct revenues from ticket sales, media rights, sponsorships, and merchandising. 'Beyond this, sports are invigorating tourism, hospitality, and transport sectors, creating ripple effects across the broader economy,' Shapochkin said. Given the nascency of the sports ecosystem in Saudi Arabia, the sector provides a particular opportunity for entrepreneurs and investors to help shape the industry and leapfrog others, according to Bain & Co.'s Kronenberg. 'This might include use cases like new ownership models and fan engagement through tokenization, unique voting rights, or new channels and technologies to stream matches,' he said. Kronenberg said the Kingdom could be the test ground for a whole set of new technologies with a young and tech-savvy population, as well as an ecosystem that encourages a 'clean slate' approach to technology deployment. PwC's Daire emphasized that Saudi Arabia is embracing digital transformation in sports, incorporating AI, virtual reality, and blockchain to enhance athlete performance and fan experience. 'According to our latest esports report 'Centre of the Game,' technology is enabling smarter sports management, real-time data analysis for performance improvement, and immersive fan experiences, from virtual stadium tours to personalized content,' he said. 'This transformation is not only improving operational efficiencies within the sports sector but also generating new revenue streams, such as data-driven sponsorships, and virtual fan engagement platforms,' Daire added. Sports-tech on the Rise Shapochkin of Oliver Wyman pointed out that globally, one in three sports fans now consume games on digital platforms, signaling a shift toward personalized, tech-driven engagement. 'The sports-tech market is expected to surpass $40 billion by 2027, driven by innovations like AR/VR (Augmented Reality/Virtual Reality), performance tracking, eSports, and AI-powered analytics. 'Saudi Arabia, with its youthful, tech-savvy population and strategic investments through entities like SAVVY Gaming Group and PIF (Public Investment Fund), is at the forefront of this shift,' he said. Shapochkin also noted that eSports alone is projected to contribute over $13 billion to the Saudi economy by 2030. As Saudi Arabia continues hosting major events like the 2029 Asian Winter Games and FIFA World Cup 2034, the adoption of smart venues, Internet of Things applications, and advanced crowd management systems is expected to accelerate. With sports and technology merging, Saudi Arabia is not just redefining its role in the global sports industry — it is shaping the future of sports business.
