Looking Ahead in Growth-Stage Investing
We’ve all seen the tech market go through a significant transformation in the last several months. There are numerous reasons for the shift, but at its essence, it was a result of businesses being valued based on potential revenue rather than solid fundamentals.
In many instances, private companies were focusing more on “growth at all costs,” and took their eye off the need to build enduring, healthy businesses. Now the capital markets are adjusting and we’re in a period where even the largest tech firms in the world are scaling back or tapering growth.
This has caused some in the venture capital and private investments space, stung by falling valuations, to scale back on investing in the tech space, but we’re not. We’re actively leaning in.
At Point72, we know what the best enduring public companies in the world look like. We invest in private companies at every stage of their growth, and we know the enormous amount of effort and work it takes to build a world-class business.
We’re as bullish about the potential of private technology companies as we’ve ever been and believe the scalability of technology, especially software, feeds the power laws that will continue to reward the best companies in a category. Many technology business models have the best margins, go-to-market potential, repeatability, and network effects out there.
Throughout the last 20 years, we’ve seen some companies scale incredibly efficiently by capitalizing on advances in technology, and we believe we’ll continue to see that pace accelerate over the next 20 years as innovation continues to grow. Now is when we will see the very best companies flourish in the market.
We’re excited about companies like Boulevard, our latest investment, which is the most comprehensive modern-day software solution for the self-care market. It’ll allow spas, salons, barbershops, med spas and a host of other self-care services to offer a seamless digital experience for booking and managing appointments. We think there’s still a long runway in the take-up of technology by consumers and businesses, and this is just one example of a company driving that transformation.
Founders sit at the nexus of these changes and are balancing different priorities in terms of runway, driving topline growth, continuing to execute on product, and pursuing strategic initiatives. We think it’s an opportune time to partner with founders and support them in building enduring market-leading technology companies, and we are creating a growth platform that is designed to be the very best partner to founders as they scale to IPO.