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European Digital Services Market | The Investment Opportunity

European Digital Services Market The Investment Opportunity

While the digital services industry faced challenges in 2023, there are signs for recovery and growth in 2024, with a focus on building integrated capabilities, leveraging AI, and driving scale via M&A.

JEGI CLARITY and CIL have conducted a comprehensive survey of leading independent businesses in the European digital services market to understand their outlook for 2024 and what opportunities they see for the year ahead.

The survey focused on three areas:

  • Market conditions: how demand for services has changed in 2023 and likely areas for growth in 2024.
  • Industry trends: how margin dynamics have impacted group structures and which trends are having the greatest impact.
  • M&A outlook: which areas are going to be the focus for investment and what
    is the outlook for M&A.

While the digital services industry faced challenges in 2023, there are signs for recovery and growth in 2024, with a focus on building capabilities, leveraging AI, and driving scale via M&A.

If you would like an in depth discussion on this topic please contact us. 

AI-volution | The unfolding story

AI-volution | The unfolding story

Recent breakthroughs, such as the advent of Generative AI tools herald a new era set to rival the impact that personal computers, the internet, and smartphones had on our lives.

This wave of innovation has the potential to propel industries forward at a pace, promising to revolutionize the way businesses operate. Tasks, once mundane, are being automated, insights are generated with greater precision, and decision-making is reaching new heights of sophistication. At the same time, AI is opening up fresh avenues of growth, sparking product and service innovations, redefining value propositions and driving operational efficiencies.

One fundamental theme, something that has been consistent across all of our research, remains the importance of the human touch. As the story unfolds, AI’s true power lies in its ability to complement and enhance human capabilities, accelerating progress and efficiency, and delivering higher quality end products and experiences. Firms are actively harnessing AI and related capabilities fueling a surge in M&A activity, as they strive to gain an edge in an increasingly digital economy.

Our report is designed to identify key themes arising from AI developments and their subsequent impact on businesses and M&A
across the following sectors:

We look forward to continuing the conversation as the story unfolds. In the meantime, if you have any queries or would like to have an in depth discussion on this topic or the broader market contact us

Value Creation with AI – Productivity vs. Growth

Value Creation with AI – Productivity vs. Growth

JEGI CLARITY’s 20th Annual Media & Technology Conference in New York City brought together senior executives and investors from across the global media, marketing, information, and technology sectors.

At the conference, Philipp Mueller, Chief Analyst & Product Officer of Outsell moderated a panel titled, “Value Creation with AI – Productivity vs. Growth.” 

The panel featured Sejal Amin, Chief Technology Officer of Shutterstock, Nikesh Kalra, Chief Operating Officer of DeepMedia, and Ilya Meyzin, SVP, Head of Data Science at Dun & Bradstreet.

The discussion kicked off with Philipp reminding the audience that ChatGPT was only launched 15 months ago. While there has been time to understand what real value creation with AI can look like, achieving it still remains elusive for a lot of companies. He continued by sharing findings from a survey conducted by Outsell in Q3 2023 that revealed that over 80% of senior executives were experimenting with Gen AI, with a third feeling very confident that it would drive productivity improvements in their enterprises. However, nearly half of the respondents lacked confidence in the ROI of their AI investments, with only 10% anticipating revenue and growth.

A lot has happened since ChatGPT was launched nearly 15 months ago.

Philipp Mueller, Chief Analyst & Product Officer of Outsell

The Impact of Generative AI on Productivity

Gen AI’s impact on productivity was the first area of discussion with the panelists.

Sejal Amin elaborated on Shutterstock’s utilization of Gen AI to enhance productivity across their operations by improving customer experience through actionable insights to their customer and sales teams, optimizing developer workflows, and bolstering infrastructure security.

Ilya Meyzin, added that Dun & Bradstreet had been employing LLMS for several years (large language models) to improve data quality, ingest data, and generate new types of insights.

The Issue of Trust and Safety with Gen AI

As Gen AI adoption increases, concerns regarding trust and safety become more acute.

Nikesh Kalra from DeepMedia discussed AI’s role in helping trust & safety teams combat nefarious content, which he quoted is now a $20bn market. 

Adopting Gen AI solutions from the third quarter of last year, Ilya from Dun & Bradstreet, emphasized the importance of addressing biases and hallucinations in AI, implementing rigorous data governance practices, and most importantly, using trusted and validated data.

Gen AI models are amazing, but many of the leading models are trained on the entirety of the internet, and the internet is a Data Frankenstein.

Ilya Meyzin, SVP, Head of Data Science at Dun & Bradstreet

Shutterstock has been using AI well before Gen AI became the norm, explained Sejal, to understand the users and meet their needs through personalized search, recommendation engines and content discovery tools. With the growth of AI usage within their business, they had increased their trust and ethics practices.

Nikesh Kalra reminded the audience that generated content was not just gathered from social media, but also from Zoom calls and across other platforms. With even the larger news and information services now turning to user generated content from sources like TikTok, he spoke about a move towards greater investment in the authentication of the data supply chain.

Trust is ultimately all we really have to run a company, country, and the world on. Authenticating the supply chain of news, information, and data, is more important than it has ever been before.

Nikesh Kalra, Chief Operating Officer of DeepMedia

Licensing and Growth resulting from Generative AI

The conversation shifted to the potential to drive revenue and growth through Gen AI.

Dun & Bradstreet is navigating the delicate balance between licensing proprietary data and protecting market competitiveness, carefully weighing the revenue upside with strategic threats. Meanwhile, Shutterstock capitalized on its immense repository of assets through partnerships with Gen AI hyperscalers, resulting in their first deal with OpenAI in 2022. Sejal Amin, however, noted a shift in demand towards tailoring smaller data sets for more conversive models.

We have to understand the user and their needs because that is the core of everything we do… As we sell our data, keeping models clean is a huge part of the responsibility we have.

Sejal Amin, Chief Technology Officer of Shutterstock

What’s in store for Generative AI in 2024? 

Finally, the panelists speculated on what the biggest development in AI would be in 2024.

For Nikesh Kalra it was the weaponizing of AI during the perfect storm of global elections, virality of social media, and the adoption of AI on a massive scale. Both Ilya Meyzin and Sejal Amin envisioned that the “rubber will hit the road” on Gen AI with worldwide enterprise adoption of it. Ilya also highlighted that in 2024 the emphasis on guardrails – LLM safety controls and protocols – will become increasingly important.

In conclusion, the discussion emphasized the potential of Gen AI to drive value, productivity, and growth, alongside the imperative of addressing the challenges of risk and governance for all.

For more information about our conference please click here.

Flywheel: The Global Vision for E-commerce

Flywheel: The Global Vision for E-commerce

JEGI CLARITY’s 20th Annual Media & Technology Conference in New York City brought together senior executives and investors from across the global media, marketing, information, and technology sectors.

The Conference finished on a high with a captivating session featuring Wilma Jordan, Founder and CEO, North America of JEGI CLARITY, in conversation with Duncan Painter, Chief Executive Officer of Flywheel, in a session titled, Flywheel: The Global Vision for E-commerce.

Stellar track record of build and sell

Wilma began by introducing Duncan, highlighting his stellar track record of building and selling businesses with achievements including a $848m deal for WGSN with private equity Apax Partners and the sale of Flywheel Digital to Omnicom for $835m. Duncan shared insights from his career, from founding consumer intelligence provider ClarityBlue, to navigating the challenges of transforming Emap from a company with zero market value through an IPO, generating a 1.5x return.

My first 180-day plan at Emap was just to stop us having to hand the keys back… stopping us going bankrupt was basically the mission.

Omnicom’s purchase of Flywheel

Transitioning to Duncan’s current role within Omnicom, the conversation turned towards retail marketplaces as a pivotable force shaping the digital landscape, and the impact they will have on the consumer orientated purchase industry. Duncan highlighted the seismic changes looming and cited John Wren, Omnicom’s Group CEO, for his foresight in positioning the organization at the forefront of change with the purchase of Flywheel.

Future of E-commerce

The discussion naturally progressed to Duncan’s perspectives on the evolving landscape of e-commerce and the future of retail.

The retail market, including retail marketplaces and retail media, is poised to undergo significant changes in the digital industry. This shift is often misunderstood, yet it represents the next major transformation in the field.

Duncan emphasized the dynamic nature of retail markets, comparing them to the stock market. He highlighted that the role of first party data is one part of the change but emphasized that the most significant element will be the provision, for the first time ever, of direct-to-consumer capabilities at mass scale with a real time view of trading across all environments. He quoted staggering statistics demonstrating Flywheel’s influence across global marketplaces with ownership of 50% of the top consumer packaged goods (CPG), 6,000 clients that use their platforms across 29 countries globally.

Throughout the day, our systems and teams constantly monitor trading activities across all our platforms in real time. The gross merchandise value (GMV) we influence amounts to hundreds of billions.

He continued by explaining that when they started to build Flywheel in 2015, they realized that they had to be inside the walled gardens of the marketplaces, building and leveraging capability for their brands. This approach not only allows the manufacturer to meet, and sell to their customers directly, but to know how every single US$ spent performs, allowing for pure retail optimization.

The future of bricks and mortar retail

With this retail trajectory, Duncan predicted that there will still be physical stores in 20-30 years, however they will be transformed into warehouses for collection rather than for customer facing retail space. With online retail sales expected to meet 40% of market share by next year and grow to 60-70% in the next five years, Duncan stressed the importance of a digital first approach, particularly as Generation Alpha had already reached 97% digital engagement.

If you aren’t a digitally enabled and digital first business, able to leverage and in a world where marketplaces will be the norm, then you are not really prepared for this 10-15 year wave.

The role of humans in future retail

Wilma inquired about the impact of digital retail on the retail workforce in the next 10 years with Duncan explaining a shift towards a more dynamic approach, where retailers would need to be “hedge fund managers rather than portfolio managers”. He explained that last year 70% of net growth on marketplaces within Amazon in the US came from direct brands from China trading directly, selling to the US population. He warned that Western retailers need to rethink their sales strategies to remain competitive against East Asian retailers whose P&Ls don’t include high salaried product, sales, and marketing directors, and therefore having the ability to invest in optimizing their products on retail marketplaces.

The current global landscape is undergoing significant changes. Traditional barriers to building, creating, and selling are diminishing, while economic models are evolving rapidly, facilitated by the rise of global marketplaces. This transformation is occurring so swiftly that many organizations have not fully grasped the implications of these shifts.

The rise of retail media

With the retail media market growing 100% year on year, even before optimization is realized, Duncan believed it will become the largest retail platform, boasting unparalleled attribution capabilities, “for the first time ever attribution is pure.” He underscored its transformative potential in advertising effectiveness and revenue generation, particularly evident in Amazon’s revenue streams.

For more information about our conference please click here.

A Glimpse Into 2024

A Glimpse Into 2024

As we embark on 2024, our global team offers their personal insights into the outlook for M&A and Private Equity across our sectors.

From a North America market perspective, I am optimistic that M&A activity will increase in 2024. Three factors contribute to this outlook.

Firstly, the accumulated dry powder among private equity firms in the US has surged from $2.39tn to a record $2.59tn over the past 12 months and many private equity clients are actively speaking to us about how they can deploy this both in traditional processes, and more creatively. Expect to see funds focusing more than ever on carve-out opportunities and asset combinations where they can create opportunities to invest outside of banker-led processes.

Secondly, given the challenging M&A market over the last 12 months, many U.S. private equity firms have portfolio companies that have exceeded their optimal holding period. In other terms, companies lingering in private equity portfolios for more than 5 years will need to be sold, as the time value of money diminishes with each passing year and pressure grows from LPs to return funds.

Lastly, assuming that the Fed is on track to start lowering interest rates in 2024, the cost of capital will decline with these reduced rates and the markets are currently pricing in a reduction of 50 – 100bps. We expect this to motivate buyers to adopt a more assertive approach in acquisitions as well as give sellers the confidence they need to take their companies to market at attractive values.

The US economy has remained stronger than many European economies, and US strategic buyers remain focused on acquiring growth both domestically and internationally. We predict that European based private equity owned companies will increasingly look to the US for buyers and investors, both as tuck-ins to existing platforms or as potential platforms in their own right.

All these dynamics will make for a more stable M&A environment that will engender confidence for buyers and sellers.

The US economy has remained stronger than many European economies, and US strategic buyers remain focused on acquiring growth both domestically and internationally.

From a UK market perspective, I feel far more upbeat going into 2024 than I did going into 2023. While the outlook for the UK economy for 2024 is mixed, we are entering a period of greater certainty in the markets which, absent any new shocks, will drive opportunity for dealmakers.

Several of the key economic indicators look better than they have at any point in the last 12 months, with headline inflation down from over 10% to under 4% today and forecast to return to more “normal” levels by the end of the year. The markets are pricing in a reduction in interest rates of over 100bps and importantly consumer sentiment appears to have turned a corner as real income levels begin to improve.

This macro-sentiment reflects what we are hearing from companies across our sectors – 2023 was hard work for the majority and really a question of managing through, 2024 is about a return to growth.

From an M&A perspective we are seeing a growing pipeline of opportunities which should come to market during the year, across both private equity and founder owned businesses. Pitch activity was higher in Q4 than at any other point last year albeit in terms of timing, it feels like most businesses will be waiting to see how 2023 closed out, and what visibility looks like on 2024 before they push the button on going to market. Everyone is aware that 2024 won’t be 2021, the bar is higher and hence every transaction will get an increased level of scrutiny from buyers and investors alike, so vendors and their advisors will be keen to ensure that all boxes are ticked – financial, commercial, and strategic – in advance of engaging in a process.

Despite the challenges of the last 12 to 18 months, the UK digital economy and ecosystem is as strong and vital as ever – continuing to grow, innovate and evolve at an exciting pace and constantly creating new ideas and opportunities, which in turn should make for a return of a vibrant M&A market in due course.

While the outlook for the UK economy for 2024 is mixed, we are entering a period of greater certainty in the markets which, absent any new shocks, will drive opportunity for dealmakers.

2023 was clearly a challenging year for private equity across EMEA: a difficult economic environment combining high inflation, high interest rates and recessionary worries; broader macro concerns around geo-political instability and the impact of Gen AI; a dearth of top quartile assets choosing to come to market; and mis-matched buyer and seller price expectations. Given all this, it was no surprise that the number of European private equity deals across our sectors fell by 32% versus 2022, with the more leverage-reliant mid and upper market feeling the squeeze in particular.

Looking into 2024, we’d certainly hope that private equity related M&A will pick up.

On the sell-side, buy-out groups globally have a record $2.8tn in unsold investments, and GPs are under increasing pressure to start returning a flow of capital to LPs, not least in the context of a tough fundraising environment. Funds need to find a way to start exiting old investments over 2024 and they will likely become more creative about how they do this where needed. We are increasingly hearing more about private equity funds being open to structured transactions including deferred components and reinvestments to get deals closed in a way that they would not have contemplated in 2021.

On the buy-side, while everyone has talked about dry-powder for years now, it remains incredibly relevant. European private equity firms are sitting on a record €350bn of cash reserves, and although some of this can and has been deployed into existing companies or through continuation funds, ultimately both LPs and GPs need to see this being invested into new platforms. The broader economic and M&A environment should help achieve this in 2024 – inflation has dropped sharply across the region, interest rates are expected to fall through 2024, recessionary concerns are easing at an IC level and buyer-seller pricing expectations are beginning to align.

Of course, timing on this is hard to call but we would hope that these factors will drive markedly higher private equity related M&A by the end of Q2.

It was no surprise that the number of European private equity deals across our sectors fell by 32% versus 2022, with the more leverage-reliant mid and upper market feeling the squeeze in particular.

Many in the start-up and venture capital community will be glad to see the back of 2023.

While some companies across our sectors continued to deliver truly impressive growth and/or profitability, for many it was a hard year with founders and entrepreneurs needing to focus much more on scalability, unit economics, GTM efficiency and cash break-even vs. topline growth, with the difficult cost-restructuring decisions that often came along with this.

Similarly, many investors were left looking hard at their in-prices and capital structures vs current asset valuations.

Looking forward, it feels like 2024 is going to be a year of re-alignment.

From an operational perspective, a lot of the really hard work has been delivered so companies are better aligned for the current environment. That may not mean a return to the 2021 and 2022 growth rates, but it does mean much more achievable, capital efficient and sustainable growth through 2024 albeit at a slightly slower pace.

From an M&A perspective, we definitely expect an uptick in M&A across the VC market over 2024 for several reasons. Firstly, we are already seeing much closer alignment around pricing between buyers and sellers, and we expect that alignment to get closer over the coming months. Secondly, strategics are back at the table, particularly in North America, as public market tech valuations have continued to strengthen in recent months. And lastly, many founder and VC backed companies are now looking at being part of a larger strategic in a more positive way than they would have done a couple of years ago – there are potentially huge synergy opportunities for independent businesses with the right larger partner, and an increasing number of independents are keen to explore these.

While some companies across our sectors continued to deliver truly impressive growth and/or profitability, for many it was a hard year.

If you have any queries or would like to have an in depth discussion on this article or the broader market please Contact us.

AI-volution | Software Development

AI-volution | The unfolding story Software Development

Authors: Jonathan Davis (Partner, EMEA), Kevin Moore (Managing Director, US), Daniel Hart (Vice President, EMEA)

In the ever-evolving landscape of technology, Artificial Intelligence (AI) has emerged as a transformative force, revolutionizing various industries. One of the most notable areas where AI is making a significant impact is software development. With the potential to enhance efficiency, elevate quality and drive innovation, AI is reshaping the way software is conceived, created, and deployed.

Key industry players are recognizing the immense potential of AI and are investing heavily to harness its capabilities.

The race to harness AI’s potential in software development is on and industry giants are leading the way. Accenture, a global consulting and professional services company, has unveiled plans to double its workforce of data and AI experts from 40,000 to 80,000. This expansion is backed by a $3 billion investment into its AI capabilities.

Infosys, a multinational corporation that provides IT services and consulting, has introduced Infosys Topaz, an AI-first suite of services, solutions, and platforms. By leveraging generative AI technologies, Topaz aims to transform the landscape of software development. Not to be left behind, Wipro has made a substantial $1 billion investment in digital transformation. Launching an AI-first innovation ecosystem, Wipro has set its sights on training 250,000 employees in AI.

These investments underscore the industry’s recognition of AI’s potential and the commitment to staying at the forefront of technological advancement.

The gradual platformization of AI is very interesting to me. The efforts by Google, Amazon, Salesforce — they’re bringing AI down to a level of not needing to be an expert to use it. … I think the day that any good software engineer can program AI will be the day it really proliferates.”

Kai-Fu Lee, Sinovation Ventures

Automating tasks for enhanced productivity – AI is taking over the mundane and repetitive tasks that have long been a part of software development. The process of code generation, testing and deployment can now be automated, allowing developers to focus on more creative and strategic endeavors. Not only does this streamline the development process, but it also translates to reduced costs, improved software quality with fewer bugs and enhanced security. This will result in faster delivery times and more efficient allocation of resources.

Elevating software quality with AI – Buggy software can lead to disastrous outcomes, both in terms of user experience and reputation. AI has the capability to identify and rectify bugs, ensuring a higher quality end product. Moreover, AI can make recommendations for better coding practices, optimizing the software’s performance.

This not only reduces the risk of software failures but also enhances the user experience. The lowered barriers for new developers to enter the market will also benefit small and medium-sized enterprises (SMEs), expanding opportunities for growth and further democratizing the use of AI in software development.

Personalized user experience through AI – Gone are the days of one-size-fits-all software. AI empowers developers to personalize software for individual users. By analyzing vast data sets, including user preferences and behaviors, AI can recommend features, functionalities and even tailor the user interface. This results in an improved user experience and leveled playing field to deliver bespoke software solutions.

Predictive insights for informed development – AI’s predictive capabilities are invaluable for software developers. By analyzing trends and forecasting future developments, developers can incorporate AI assisted predictive logic into code to help make informed decisions and plan ahead. This not only enhances the return on investment but also mitigates the risk of obsolescence. Software projects can adapt and evolve in tandem with technological shifts, ensuring long-term relevance.

Multimodal methods: bridging the gap – The industry is witnessing a shift toward multimodal technologies that enable software development based on visual representations like drawings or wireframe blueprints, rather than solely relying on text and language-based interfaces. This innovation, with an increasing assist from AI tools, opens new doors for less technically skilled teams, fostering greater collaboration between various stages of development. The barriers between various development teams are being dismantled, leading to agile, streamlined processes from inception to the final product.

Amid the advancements of AI in software development, a central theme remains: AI is not here to replace human developers, but rather to augment their capabilities. Think of AI, like OpenAI’s ChatGPT, Amazon Q or Github CoPilot, as a coding AI assistant. It aids in generating boilerplate code, offering new ideas and automating routine tasks.

It is essential to note that the human touch is indispensable in understanding how to leverage AI’s insights and adapt them creatively to specific projects. As well as monitor for errors and prevent rogue code from being released.

The relationship between AI and human developers ensures that technology serves as a tool for innovation rather than a substitute for human expertise.

As AI continues to evolve and redefine the landscape of software development, we stand at the brink of a new era. With investments pouring in from industry leaders like Accenture, Infosys, and Wipro, as well as every major enterprise software company, the potential for AI to revolutionize software development is unparalleled.

From automating tasks and elevating software quality to personalizing user experiences and enabling predictive insights, AI is ushering in a new wave of efficiency, creativity, and innovation. Developers are not being replaced by machines; rather, they are collaborating with AI to push the boundaries of what is possible. As we move forward, the harmony between human intellect and AI prowess promises to reshape the world of software as we know it.

We look forward to continuing the conversation as the AI-story unfolds. If you have any queries or would like to have an in depth discussion on this topic or the broader market please Contact us. Our next AI article delves into the world of Technology & Consulting Services.

AI-volution | Events & Conferences

AI-volution | The unfolding story Events & Conferences

Authors: San Datta (Partner, EMEA) & Kathleen Thomas (Managing Director, US)

The last year has seen the Events industry bounce back faster than anyone expected. The face-to face (F2F) industry, be it exhibitions, conferences, peer-to-peer or experiential has seen a surge in growth with events participants having a renewed appreciation of the value of F2F engagement in driving sales, networking, learning and collaboration.

While the fundamental allure of in-person interactions remains unchanged, the rise of Artificial Intelligence (AI) is enabling a new era of enhanced experiences, efficient operations, and innovations within the industry.

The reasons that people attend events is unlikely to dramatically change due to AI advancements. AI technology is finding its stride in augmenting these connections, providing scope to deliver more innovative, cost effective, efficient, and tailored experiences.

AI-Powered Trends

Lead generation and qualification

A key part of AI’s potential impact on the events sector lies on its prowess in real-time crunching of huge amounts of data. The ability to aggregate and analyze diverse proprietary data sets (e.g. feedback, registrations, interactions, sales patterns) with third party unstructured data (e.g. social media activity and engagement) will allow rapid qualification, identification and prioritization of leads for exhibitors in advance and on the day to ultimately drive higher levels of engagement and conversion.  

Efficiencies through automation

The challenges of event planning – from registration and ticketing to speaker management and content production – are now prime candidates for AI-powered automation. Chatbots are emerging as versatile assistants, addressing attendee inquiries, processing payments, and distributing tickets. This automation will not only accelerate tasks but could free up event staff to focus on value-added endeavors. Eventex, for example, has already incorporated ChatGPT into its event management platform. Behind the scenes, event logistics are becoming more streamlined by AI tools that manage speaker availability, venue capacities and attendee preferences – helping organizers be more efficient.

Innovative and tailored event experiences

AI can also create new, innovative event experiences. While Generative AI based chatbots can drive efficiencies, they can also act as virtual concierges at events, providing attendees with instant and tailored guidance. Social media monitoring becomes a powerful tool to gauge attendee sentiment in real time, which could enable rapid interventions and elevate the overall event atmosphere. Facial recognition technology is being deployed to read attendee emotions, providing a new source of real-time data that paints a vivid picture of overall feeling, albeit at the risk of invading the privacy of attendees. All of these and more can potentially be combined with data based on footfall, visitor flow, content engagement, conference attendance and more. All of this data can then be used to optimize event dynamics on the fly.

Similarly, the advent of virtual and augmented reality offers novel opportunities for hybrid events that engage both on-site and remote participants. Through real-time translation of speeches and transcripts, audiences can be extended worldwide while on the ground, participants can be engaged more actively and creatively.

AI in set design testing becomes an agile playground for organizers, who can experiment with various layouts and ideas in a low-cost, nimble fashion. This innovation will help to precisely curate F2F experiences that cater to attendees’ needs and preferences.

Conclusion

Utilizing cutting-edge data analytics, seamless automation, and new innovations, AI is reshaping the landscape of events, transcending them beyond conventional gatherings. Participants can take part in captivating and tailored experiences, while event organizers have an opportunity to benefit from enhanced efficiencies and the invaluable insights that support an ongoing process of improvement.

Despite the continued integration of AI, the bedrock of success for any event remains rooted in authentic human connections, rendering the industry more robust against AI disruption.

As event organizers continue to amass operational efficiencies and AI technologies enhance the value proposition for attendees, the sector remains an attractive area to explore from an investment perspective.

We look forward to continuing the conversation as the AI-story unfolds. If you have any queries or would like to have an in depth discussion on this topic or the broader market please Contact us. Our next AI article delves into the world of Software Development.

AI-volution | Legal & Compliance Technology

AI-volution | The unfolding story Legal & Compliance Technology

Authors:  Scott Mozarsky (Managing Director, US) & San Datta (Partner, EMEA)

Generative AI represents the next, and potentially most meaningful, key stage of Artificial Intelligence impacting the legal market. Generative AI ushers in a new era of efficiency involving automating routine tasks, enhancing legal research, and reshaping how lawyers construct arguments. Its potential to unlock unprecedented insights, streamline contract management, and predict legal outcomes heralds a transformative journey that promises to redefine the legal landscape for lawyers and clients alike.

History of AI in the Legal Industry

AI has already had an undeniable impact on the legal industry. There have been several pivotal stages, from eDiscovery Technology Assisted Review (TAR) and Litigation Analytics to Document Automation and Contract Analytics, that are important to understand when considering the impact that we anticipate Generative AI will have on this market.

The legal world saw its first glimpse of AI’s potential back in 2005 with eDiscovery TAR, which introduced a future where artificial intelligence could perform document review by detecting patterns in documents, effectively optimizing the tedious discovery process. TAR has been a critical driver of eDiscovery ranging up to becoming a $20B industry. Despite the subsequent innovations, across the market TAR remains the largest and most successful example of AI’s impact on the legal market.

Fast forward to 2012, and the legal market began to witness the rise of litigation analytics. Litigation analytics involved leveraging AI to detect patterns in data coming out of dockets, and case law to deliver profound insights and analytics on law firms, companies, and judges. These analytics are used for business and practice of law purposes. At first, the market was dominated by companies like Bloomberg Law, Docket Alarm and Lex Machina, but now a diverse range of players, from established companies to nimble startups, offer litigation analytics.

The mid-2010s marked a period of transformation through document automation. Before the era of Generative AI, we witnessed automated form completion based on decision trees and app-driven expert systems. Neota Logic and LegalZoom were early disruptors across both B2B and B2C, while Legalmation led the way in providing automation of pleadings in litigation. Since then, no-code/low-code platforms have become increasingly popular, allowing users to deploy software applications without needing a technical background.

The impact of AI extended to contract analytics, encompassing everything from pre-execution contract analysis to contract lifecycle management. Pattern recognition AI technology, effectively the early TAR on steroids, laid the foundation for contract analytics. Not limited to just legal use cases, contract analytics also ventured into compliance and front of the house use cases. A surge in capital raises during 2019-2021, and early 2022 has led to inevitable market consolidation.

Generative AI: Shaping the Future

The arrival of Generative AI back in 2022 heralds a new era of efficiency and effectiveness for legal professionals. Lawyers can leverage AI to handle repetitive and lower-end tasks, freeing up invaluable time and resources for higher-complexity, value-added work. In-house legal groups are increasingly turning to AI and tech-enabled solutions instead of relying on outside counsel. These advancements are now bearing fruit for early adaptors.

Internet browsers and the World Wide Web popularized the Internet for most people, and that development transformed whole industries, including law. In a similar way, Generative AI is the first exposure that most people have to powerful AI tools. Generative AI is just as disruptive. It is already changing what legal services law firms offer, how they price services, and what tasks corporate legal departments can handle in-house.

Ed Walters, Chief Strategy Officer, vLex

Automated Legal Research and Analysis

Generative AI possesses the unparalleled ability to process vast volumes of data faster and more accurately than humans. It can extract relevant information, answer questions, and build robust legal arguments.

Litigation Moneyball

Legal professionals can use Generative AI to analyze data to identify high-value clients, predict likely outcomes and behaviors, and recommend case strategies and settlement analysis. This revolutionary technology is already transforming areas such as personal injury, class action, and mass torts.

Contract Generation and Management

Generative AI streamlines the process of drafting and negotiating contracts. It provides invaluable insights that have the potential to standardize certain contract types across the market.

Litigation Workflow Enhancement

The benefits of Generative AI extend to AI-generated case law summaries, accelerated document review and summarization, deposition preparation, and regulatory compliance. It even takes on tasks like automated transcription, brief preparation, and formatting.

Conclusion: Embracing the AI-Powered Future 

While we stand at the threshold of Generative AI’s influence in the legal market, its accuracy and adoption are still in the early stages. Yet, the trajectory is clear. Generative AI is poised to transform workflows, enhance efficiency, and empower lawyers to focus on the more strategic aspects of their profession. In the end, the synergy between human expertise and artificial intelligence is the way forward in the legal world.

M&A Role

Given the anticipated pace of transformation and the increasing adoption of Generative AI, we expect M&A to play a pivotal role in the legal market as firms look to gain a competitive edge. The table below includes AI-related transactions in 2023, which highlights this trend.

We look forward to continuing the conversation as the AI-story unfolds. If you have any queries or would like to have an in depth discussion on this topic or the broader market please Contact us. Our next AI article delves into the world of Events and Conferences.

AI-volution | CGI, Animation & VFX

AI-volution | The unfolding story CGI, Animation & VFX

Authors:  Jonathan Davis (Partner, EMEA), Daniel Hart (Vice President, EMEA), Adam Gross (Managing Director, US)

The worlds of CGI, Animation and VFX are undergoing transformation, fueled by the proliferation of generative AI content creation tools. This wave of innovation promises to streamline workflows, unleash creativity and elevate audience engagement like never before.

In this article, we delve into the cutting-edge developments in AI, explore the potential challenges of copyright and fair compensation and discuss how innovation is reshaping the industry’s landscape.

The AI Revolution in CGI, Animation and VFX

Generative AI is taking center stage with a host of new tools, such as MidJourney, Runway.ai and WonderStudios. Alongside these, industry giants like NVIDIA are making groundbreaking strides with their Neuralangelo platform, which transforms 2D spaces into lifelike 3D environments. These developments are lowering the barriers of creativity, giving artists the power to swiftly ideate, develop and pitch concepts.

But the greatest impact could arise from automation. Once time-consuming manual tasks, like rotoscoping, are now being automated, cutting down laborious efforts from hours to minutes. Productions like “Everything Everywhere All at Once” are testament to this transformation, with VFX teams that once numbered in the hundreds now reduced to a core squad of 10 engineers.

Put to its best use, AI has the potential to become an essential collaborative creative partner helping to empower the next generation of VFX artists. Not only will it improve productivity, but it will also enable artists to explore new creative opportunities, re-imagine new creative visions and just as importantly preserve mental wellbeing.

David Patton, CEO of Jellyfish Pictures

Copyright Challenges and Fair Compensation

However, the rise of AI is not without its ethical and legal complexities. Generative AI technology often draws upon existing art, designs and content to create new outputs. This raises questions about copyright infringement and fair compensation for original creators. With outdated copyright laws ill-equipped to address these modern issues, the industry is calling out for reform.

In the US, writers staged a strike demanding higher pay and fairer contracts, particularly regarding the use of artificial intelligence in creative processes. Companies remain cautious about leveraging AI for client work, fearing high-profile copyright claims could significantly impact their reputations. This shift will particularly benefit those with vast databases of content, potentially creating a new hierarchy of content ownership.

One solution could be the implementation of smart contracts and non-fungible tokens (NFTs). These technologies have the potential to ensure fair compensation for creators by establishing transparent and immutable ownership records for AI-generated content.

Embracing Innovation

As AI continues to empower the industry, personalization emerges as a new frontier. The technology could, for example, be used to allow anyone to become the main protagonist in their favorite film or show, forging modern connections between audiences and content. Furthermore, leveraging Intellectual Property (IP) across multiple formats, from 2D to AR and VR, has become more feasible and cost-effective. This shift opens doors to interactive experiences, for example taking control of a VR spaceship, letting the audience play a pivotal part in a film.

The Human Touch

Despite the transformative potential of AI, it is crucial to remember that human intervention remains paramount in creating art with a soul. AI tools can revolutionize the production process, but they cannot yet replace the essence of human imagination and emotion. There will likely always be a need for artists and storytellers who breathe life into AI-generated concepts, bringing authenticity and depth to the finished product.

Profit Margins and Production Dynamics

The impact of AI on profit margins is a subject of both hope and concern. While automation could potentially lead to cost savings, questions arise about whether these benefits will be passed onto brands, content owners and studios. Will the increased efficiency of AI-driven workflows result in increased procurement pressure, more productions or simply lead to larger profit margins for production studios?

As AI democratizes certain aspects of the process, lowered barriers to entry may inadvertently lead to increased competition, subsequently impacting the pricing and value of Animation and VFX services.

Key themes related to AI in the market

Conclusion

The CGI, Animation and VFX industries stand at the precipice of an extraordinary era driven by generative AI, where human creativity and technological innovation converge in powerful harmony.

However, the industry must address the challenges of copyright and fair compensation to ensure that creators are duly rewarded for their contributions. With mindful regulation and the integration of human artistry, AI promises to elevate storytelling to new heights, redefine audience engagement and unlock an unprecedented realm of possibilities. As we navigate this new frontier, we look forward to the potential opportunities AI has to offer while valuing the human-led businesses that will take the industry to the next level.

M&A Role

Although fast-moving, AI-technology in Animation and VFX remains relatively nascent, and the sector has yet to witness a slew of AI-driven M&A deals. 

Indicators of a game-changing future are apparent with venture capital increasingly flowing into AI enterprises.  Notable among these are Move.ai, which is transforming movement in digital settings, Speech Graphics, with their speech-based facial animation software, and MARZ, introducing a ready-to-deploy AI solution for VFX.

These investments herald a promising era of AI-driven creativity and efficiencies in Animation and VFX.

We look forward to continuing the conversation as the AI-story unfolds. If you have any queries or would like to have an in depth discussion on this topic or the broader market please Contact us. Our next AI article delves into the world of Legal and Compliance Technology.

Power of 5: Events Reinvigorated

Power of 5: Events Reinvigorated An Industry on the Move

5 Leaders, 5 Questions, 5 Minutes

In our most recent Power of 5 series, JEGI CLARITY Managing Director, Kathleen Thomas and Partner, San Datta asked five questions to five leading executives across the global B2B Information and Events landscape.  

This series featured Peter Jones, CEO of Nineteen Group, Lisa Hannant, CEO of Clarion Events, Paul Miller, CEO of Questex, Gareth Bowhill, CEO of CloserStill and Simon Foster, Group CEO of Arc. A big thank you to all the participants for their involvement.

Here we share some of their collective thoughts on the trends and opportunities ahead for the events industry. Please click here if you would like to access the videos.

How have you seen the B2B events market evolve in the last 12-24 months?

The resounding story from the B2B Information and Events sector over the past couple of years has been the successful return of live events. 

We’ve seen a ferocious appetite from both exhibitors, sponsors and also delegates to come back to events.

Gareth Bowhill, CEO, CloserStill

Peter Jones of Nineteen Group emphasized the value of live events, suggesting that their true worth became evident only when they were temporarily lost. A sentiment echoed by Gareth Bowhill of CloserStill who stated that their revenues have surged by 15% organically compared to pre-Covid levels.  Statistics and attitudes of clients clearly indicate that people wanted live media that they could trust for lead generation opportunities, continued Simon Foster of Arc. 

However, as several participants in the Power of 5 identified, the composition of event audiences has undergone significant changes.  Lisa Hannant of Clarion observed that there was a trend happening pre-pandemic of people, both in the industry and customers, changing roles, which has accelerated post-pandemic. She noted that industry operators need to adapt as their customer base is predicted to change roles every two-three years, which would continue to drive a shift towards many more first-time attendees to the events. 

This change in audience masked a second trend explained by Paul Miller of Questex – the entrance of technology and software into the market. These tools enable data driven strategies that, through smarter customer insights, are resulting in better products and more meaningful relationships. 

We see ourselves as a modern media business, bringing communities together 365, 24/7.

Paul Miller, CEO of Questex


Where do you see the key opportunities for your business during the next year?

There was an agreement from all the participants that the future is omnichannel businesses that seamlessly integrate content and live events with strong membership models.

Nineteen Group’s commitment to embracing digital through podcasting and digital events, while retaining a focus on physical events was the main emphasis for the next year according to Peter Jones.  Gareth Bowhill of CloserStill outlined their core growth levers being existing events and extensions of these brands, new product launches and engaging in M&A, seeing a landscape that allows them to push forward on all fronts.

We have a comfort in the many different formats that customers want to meet their customers – whether a conference, one to one event, digital or in-between – that allows us to respond in the right way to whatever customer group we are serving.

Lisa Hannant, CEO of Clarion Group

Simon Foster of Arc revealed their future strategy of integrating businesses within their group and leveraging the expertise and knowledge and different elements they have within the business to deliver success to their clients.  A commitment to doubling down on the data driven strategy aimed at providing superior products, that had been shaped from intelligence generated through interaction with content on their websites, was stated as a key opportunity for Paul Miller of Questex.

From an M&A perspective what is your criteria and where are you focusing?

Criteria for possible mergers and acquisitions included shared interests with existing organizations – mutual markets, complementary geographies, client synergies – or adjacent industries, companies with talent sets that can help build greater businesses and those with matching cultures and ethos. 

Lisa Hannant of Clarion mentioned that they have a clear view of the sectors the Clarion team felt the business was potentially unweighted in and wanted to push harder in. Gareth Bowhill of CloserStill, echoed this sentiment, emphasizing the importance of opportunities of the underlying markets they are already serving. 

Paul Miller of Questex stressed the significance of EBITDA thresholds and focusing on businesses with verticals they are already within or adjacencies to the verticals, so they can build buy-sell strategies. Peter Jones of Nineteen Group emphasized their strategy of identifying established, successful events with existing infrastructure and enhancing them to achieve even faster growth.

There were no real limitations when it came to regions for most, although the US, Europe and Asia were of particular focus. 

We are looking at businesses that fit with our existing structure and existing markets that can add value as opposed to just driving scale.

Simon Foster, Group CEO, Arc

If you look at the landscape, who of your peers do you admire?

Companies that are not only great to the outside world but are focused on building culture and strength internally while growing was the type of business Simon Foster of Arc admired. While Lisa Hannant of Clarion Group acknowledged how there is so much good work from so many organizations in the sector – from larger companies to smaller, more nimble start-ups. But what she admires most are those companies that are focused, and purpose driven around individual markets. Paul Miller of Questex commended companies that prioritize culture and leadership and are not building just a great business but a strong culture as they grow.

Phil Soar is an absolute genius. He has the ability to see around corners in blizzards.

Peter Jones, CEO of Nineteen Group

All the stakeholders underscored the importance of collaboration within the sector, acknowledging their peers and their organizations as those they admired and respected the most. Clear articulation around company vision, purpose driven business models around individual markets, leading stances on ESG initiatives and those that embedded culture into their leadership were admired by all. 

It is evident that these five leaders are at the forefront of driving the Information and Events landscape, with a shared vision for a promising and vibrant future.

To view the full interviews, please access Power of 5  Series – Events reinvigorated.

If you want to learn more about this series or the market more broadly, reach out to us at  Contact us