Recently, Altvia Chief Revenue Officer, Kjael Skaalerud, joined other private equity industry experts in a webinar titled Massive Tech Upgrade: How Does It Help PE?
Moderated by Siris Capital Group Partner, Harrison Lung. The session focuses on the increasing importance of PE Technology.
Pandemic-Driven Technology Adoption
Harrison’s first question to the panel—which includes Yellow Wood Partners Principal, Sarah Mascioli Ensslen, and Aspen Capital CTO, Jacek Materna—is how the pandemic has affected technology adoption, including how it impacts GPs, LPs, and portfolios.
Kjael notes that surveys Altvia has sent out indicate that firms have differing opinions about what the industry will look like going forward, including a 50/50 split regarding in-person annual meetings versus online gatherings. So, it seems a hybrid approach is likely.
Sarah observes that the pandemic and resulting reliance on technology has driven tremendous increases in efficiency and also in a firm’s capacity for connecting with stakeholders, both in terms of number and frequency of contacts. She also points out that firms are benefitting from the fact that video conferencing is much more personal than simple phone calls.
Jacek talks about the advantages that firms gain in the areas of workflow and productivity from leveraging more advanced technology tools. He also notes that having identified those advantages, firms are accelerating their timelines for technology adoption.
PE Tech Adoption: Survival or Competitive Edge?
Harrison goes on to question the panel about technology adoption as a “survival” necessity during the time of travel and in-person meeting restrictions versus technology adoption as a differentiator and a means to create a competitive edge. The panelists agree that the pandemic made technology adoption an absolute necessity—without new ways to communicate and connect with stakeholders, many firms would not have survived—but also concur that the crisis was an eye-opener regarding technology’s potential to create a strategic advantage.
For example, Sarah notes that video conferencing, which wasn’t often used before the pandemic, is now “an integral part of our way of working” and that her firm has greatly accelerated its use of data to stay ahead of the competition. Jacek shares that while technology was previously seen as an operational tool, it’s now viewed as have tremendous strategic value. He also points out the shift in mindset that firms and portfolio companies are now looking to surround themselves with technology partners that can help them create value.
Kjael notes that there seem to be two “cohorts” when it comes to technology: firms that are comfortable sticking with the status quo and firms that are “thinking about technology as a point of differentiation.”
In particular, his conversations with firms have revealed different levels of capitalizing on data—1.0, they have their data in one place, 2.0, they use visualizations to quickly interpret the data, and 3.0, they start using predictive algorithms and other tools to gain insights and speed on the fundraising and deal side.
Data Management & Governance
In another part of the webinar, the experts go into greater detail on data use, management, and governance. Sarah mentions that on the consumer side, data like cash register transactions and customer surveys have long been the lifeblood of businesses, and are used both in finding new and emerging brands and also in assessing the brands from a competitive standpoint for investment purposes.
Jacek says that his firm isn’t simply looking at data, but rather building and harnessing data platforms—to drive their commercial and residential real estate purchase decisions, for example. They’re focused on using data as a “force multiplier.” Kjael observes that with the availability of data “exploding,” it’s crucial to determine what types of data are most important to you and, in that way, to create some advantageous data asymmetry.
Other Valuable Insights
Another key point of discussion in the webinar is how firms are mindful that “with great (data) power comes great responsibility,” including data security and data management regulations like GDPR and PII. The panelists also shared their thoughts on the ongoing shift toward more open technology ecosystems.