Market due diligence results in 25% jump in revenues for supercomputing startup

Posted by | Fuld & Company

How Fuld helped our PE client’s portfolio company prioritize their target markets

Our Private Equity client’s portfolio company, a US-based startup specializing in supercomputing for AI model training and execution, needed to assess and prioritize new industry verticals to target for expansion. Leveraging Fuld’s exhaustive analysis of 15 potential verticals, the company was able to focus on the top vertical, leading to a 25% increase in revenues within two years.

Objective

To facilitate their portfolio company’s growth strategy, our Private Equity client engaged Fuld & Company to conduct a comprehensive market assessment of sectors including healthcare, financial services, and defense, specifically for their potential to use big data applications. The goal was to identify new opportunities and gauge the relative long-term market potential for supercomputing in these markets.

Solution

Backed by robust research and strong sectorial expertise, Fuld identified 15 verticals with substantial data usage potential. We further narrowed down the list to four key verticals poised for the most significant growth over the next decade: biotech, telecommunications, gaming, and robotics and drones. For each vertical, Fuld undertook:

• Market player categorization: Classification of market players into tiers, including top/tier 1, middle, and smaller players.
• Growth trajectory analysis: Evaluation of the growth trajectory of each tier, categorizing them as low, medium, or high.
• Use case and pain area assessment: Analysis of the potential use cases and pain points where AI-based supercomputers can be leveraged. We provided a relative ranking to these verticals and identified those where the most opportunities exist.
• Partnership and vendor analysis: Identification of existing partnerships between leading players in each vertical and computing infrastructure vendors and suppliers, to identify potential collaboration opportunities.
• Capex spend assessment: Assessment of capital expenditure on computing infrastructure by tier within each vertical.

This comprehensive analysis enabled the company to make informed decisions and devise a short-term strategy for market entry.

Impact

The company successfully pursued one of the verticals recommended by Fuld as a starting point, resulting in new clients and a 25% revenue increase over the subsequent two years. Fuld & Company continues to support the company in entering the remaining three verticals and expanding its future revenue growth potential.

Tags: private equity