Arctic Wolf PDF

Arctic Wolf Teardown

Arctic Wolf: End-to-end managed cybersecurity around the clock

AI-based solutions for evolving digital threats

Next-gen Cybersecurity

<div>
 <ul>
 <li>
 
 CrowdStrike's faulty update on July 19, caused widespread &quot;blue screen of death&quot; issues, affecting 8.5 million Windows devices globally.
 
 </li>
 <li>
 
 The incident paralyzed critical industries, impacting government agencies, stock exchanges, hospitals, and airlines, causing economic shockwaves.
 
 </li>
 <li>
 
 The report looks at a timeline of key events, CrowdStrike&rsquo;s response, and potential opportunities for its rivals.
 
 </li>
 </ul>
 
 
</div>

<div>
 
 A faulty update from cybersecurity giant 
 <a href="https://sp-edge.com/companies/75532">
 CrowdStrike
 </a>
 drove the digital world to a halt on July 19, 2024. In a matter of hours, an estimated 8.5 million devices with Windows systems worldwide succumbed to the dreaded &ldquo;blue screen of death&rdquo; (BSOD), paralyzing critical industries and sending shockwaves through the global economy.
 
 
 From government agencies and stock exchanges to hospitals and airlines, the CrowdStrike Falcon platform's widespread adoption turned a routine update into a catastrophic event, leaving IT professionals scrambling to orchestrate what&rsquo;s going to be a very hands-on recovery process largely.
 
 
 As the dust settles, questions loom about the controls (or lack thereof) at CrowdStrike that led to this slip-up, and what&rsquo;s next for the company as it emerges from corporate losses that could exceed USD 5 billion. This report aims to answer those questions by delving into what exactly happened, a timeline of key events, CrowdStrike&rsquo;s response, and potential opportunities for its rivals.
 
</div>

How a glitched CrowdStrike update caused the blue screen Friday

Exploring the limitless possibilities of AI

Generative AI Applications

<div>
 <ul>
 <li>
 
 AI avatars has seen adoption by salespeople who were early adopters, influencer marketing and social media advertising platforms, as well as areas like doctor-patient communication. High level of high usage in learning and development, sales, marketing.
 
 </li>
 <li>
 
 The research focus for Tavus includes capturing small nuances in the face, how a face moves naturally, gestures, and bringing that to life with the content the user wants to generate.
 
 </li>
 <li>
 
 Tavus uses its own models for talking head generation and for lip-syncing and dubbing.
 
 </li>
 <li>
 
 Raza expects Tavus to eventually become the foundational platform for digital twin experiences across the ecosystem.
 
 
 
 
 
 </li>
 </ul>
 
 
</div>

Tavus CEO Hassaan Raza on building the AI avatar developer platform

Building future-ready applications in the cloud

Cloud-native Tech

<div>
 
 A deep dive into Sentry's revenue, business model, product, competition and TAM expansion.
 
</div>

<div>
 <ul>
 <li>
 
 Sentry reached USD 128 million in annual recurring revenue (ARR) in 2023, showing a 30% year-over-year increase. This growth was driven by the platform's focus on self-serve models and investments in product and engineering to launch new features and expand use cases.
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Sentry employs a hybrid open-source and self-serve SaaS model, allowing developers to start using the platform without sales interactions. The self-serve model accounts for 70% of Sentry&rsquo;s revenue, with developers signing up directly through the website at an entry point of USD 26 per month.
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Sentry competes with observability vendors like Datadog and New Relic, open-source error tracking tools, and startups bundling error monitoring into broader offerings. Sentry's platform stands out with its developer-first approach, wide language support, and efficient customer acquisition.
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Sentry has market expansion potential by transitioning from error tracking to application performance monitoring (APM), a significantly larger market. The company plans to leverage its large self-serve user base to upsell APM features and convert open-source users to paying customers.
 
 </li>
 </ul>
 
 
</div>

Sentry: Optimizing code with advanced developer monitoring tools

<div>
 <ul>
 <li>
 
 Four states announced privacy regulations and a national privacy law was floated.
 
 </li>
 <li>
 
 Funding was buoyed by a USD 1 billion late stage investment in cloud security provider Wiz.
 
 </li>
 <li>
 
 Darktrace being taken private was the highlight of M&amp;A news amidst a number of big-ticket deals.
 
 </li>
 </ul>
 
 
</div>

<div>
 <h1>
 Key takeaways
 </h1>
 <ul>
 <li>
 <h4>
 Regulations
 </h4>
 <ul>
 <li>
 
 Four states enacted privacy legislation: 
 The count of states with privacy laws rose to 18 in Q2 2024, as Kentucky, Nebraska, Maryland, and Minnesota enacted privacy legislation. Another attempt at a national privacy law was brought this quarter, with the 
 <a href="https://www.whitecase.com/insight-alert/proposed-american-privacy-rights-act-seeks-establish-comprehensive-national-framework">
 American Privacy Rights Act
 </a>
 (APRA) debated at committee hearings. 
 The APRA is the latest attempt at a unified privacy framework in the US; if passed, it would alleviate pressure on cross-state companies to keep up with multiple state privacy laws.
 
 </li>
 <li>
 
 In other news, the European Data Protection Board (EDPB) 
 <a href="https://www.williamfry.com/knowledge/edpb-issues-opinion-on-pay-or-ok-consent-models-applied-by-large-online-platforms/">
 adopted
 </a>
 an opinion on the non-compliance of Pay or Okay models for behavioral advertising, and companies on both sides of the pond found themselves running afoul of privacy regulations.
 
 </li>
 </ul>
 </li>
 <li>
 <h4>
 Funding
 </h4>
 <ul>
 <li>
 
 Q2 funding was buoyed by a USD 1 billion Wiz round: 
 Cybersecurity startups raised USD 2.1 billion across 33 rounds during Q2 2024, up ~24% QoQ. Around half of this came from cloud security firm 
 <a href="https://sp-edge.com/companies/1216301">
 Wiz
 </a>
 &rsquo;s 
 <a href="https://sp-edge.com/updates/29220">
 USD 1 billion
 </a>
 in late-stage funding. A small number of growth funding rounds made up the bulk of the other half of funding. This 
 contrasts last quarter, where we observed numerous mega deals comprising the majority of funding.
 Funding on an upward trend in the last few quarters and consistently large deals each quarter
 may signify a return to highs seen in the last few years,
 with investors focusing on late-stage startups.
 
 </li>
 </ul>
 </li>
 <li>
 <h4>
 Product updates
 </h4>
 <ul>
 <li>
 
 CrowdStrike unveiled some key features for Falcon: 
 We did not observe any major product launch trends in Q2 as with secure access service edge (SASE) and GenAI in previous quarters, with most 
 participants seemingly preferring to bolster their existing products through feature and functionality upgrades.
 
 <a href="https://sp-edge.com/companies/75532">
 CrowdStrike
 </a>
 was the exception by 1) announcing an insurer-focused version for Falcon, 2) updating its security information and event management (
 <a href="https://sp-edge.com/updates/29249">
 SIEM
 </a>
 ) platform with GenAI and automation capabilities, and 3) unifying application security posture management (ASPM) with Falcon Cloud.&nbsp;
 
 </li>
 <li>
 
 Notably, 
 Alphabet was the only Big Tech with notable product updates
 this quarter, announcing the integration of its Gemini AI model with Mandiant and VirusTotal.
 
 </li>
 </ul>
 </li>
 <li>
 <h4>
 Partnerships
 </h4>
 <ul>
 <li>
 
 We saw numerous updates from Alphabet and Microsoft focusing on improving existing platforms and extending services across environments: 
 While Big Tech once again came to the forefront of collaboration, we observed a decline in partnerships (28 in Q2 vs. 42 in Q1) during the quarter. Most of these partnerships focused on
 the integration of existing products, extending services to new environments, or adding on features and functionality
 . Alphabet, via Google Cloud, was the most active company, announcing nine partnerships in Q2 ranging from threat intelligence integrations to infrastructure alliances, while Microsoft announced a number of IAM partnerships. Other incumbents like Amazon and Cisco were also active during the period, which saw minimal disruptor participation.
 
 </li>
 </ul>
 </li>
 <li>
 <h4>
 M&amp;A
 </h4>
 <ul>
 <li>
 
 Darktrace leads mammoth deal season: 
 The British cybersecurity company announced it was being 
 <a href="https://sp-edge.com/updates/28909">
 acquired
 </a>
 by private equity firm Thoma Bravo in a 
 USD 5.4 billion take-private deal in a quarter that saw two more acquisitions exceeding the billion mark
 : 
 <a href="https://www.cyberark.com/press/cyberark-signs-definitive-agreement-to-acquire-machine-identity-management-leader-venafi-from-thoma-bravo/">
 CyberArk acquiring Venafi
 </a>
 and 
 <a href="https://sp-edge.com/updates/30389">
 Fortinet acquiring Lacework
 </a>
 . We also observed a number of other deals focusing on synergies between platforms.
 
 </li>
 </ul>
 </li>
 </ul>
 
 
</div>

Cybersecurity (Q2 2024): Billion-dollar Wiz deal bolsters funding amidst big-ticket M&As

Driving livestock productivity using next-generation biotechnology

Livestock Biotech

<div>
 
 This report delves into gene editing of non-human organisms such as plants and animals. The report mainly focuses on the Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR-Cas9) technique and the role it plays in livestock and crop production applications.
 
</div>

<div>
 <ul>
 <li>
 
 CRISPR-Cas9 represents a major breakthrough in gene editing, surpassing traditional GMO techniques by offering precise, efficient, and cost-effective modifications. This innovation enabled targeted alterations in reproductive cells, providing a more reliable way to enhance crop and livestock traits, potentially transforming the agriculture industry.
 
 </li>
 <li>
 
 With global food demand projected to increase by 60% by 2050, CRISPR-Cas9 technology could play a crucial role in addressing this challenge. By developing crops and livestock that are more resilient to diseases and environmental stresses, CRISPR can help ensure a stable and sustainable food supply despite diminishing arable land and climate change.
 
 </li>
 <li>
 
 CRISPR-Cas9's application in animal gene editing holds promise for optimizing livestock production. This includes controlling the sex of offspring for industry-specific needs, enhancing disease resistance, and eliminating undesirable traits. These advancements could lead to more efficient and ethical livestock management, though they raise significant ethical and regulatory questions.
 
 </li>
 <li>
 
 The global response to gene-edited foods varies, with some regions like the US and EU enforcing strict regulations, while others like Brazil, Argentina, and England adopt more flexible approaches to stimulate their agricultural sectors. These regulatory differences will shape the pace and scope of CRISPR technology adoption, with the first commercial gene-edited crops expected by 2028.
 
 </li>
 <li>
 
 CRISPR-Cas9 technology is poised to significantly boost the agricultural market, potentially adding USD 165 billion by 2025. The crops segment, particularly in plant breeding, stands to benefit the most, driven by increasing demand for higher yields and better crop varieties. This growth is essential for meeting the challenges posed by population growth and environmental changes, positioning CRISPR as a key player in the future of agriculture.
 
 </li>
 </ul>
 
 
</div>

Gene Editing (Non-Human)

<div>
 <ul>
 <li>
 
 SAF and fusion received government support while the US and EU strengthened carbon regulations
 
 </li>
 <li>
 
 Funding hit a three-year low, but funding into long-duration energy storage, clean hydrogen, and CCUS continued
 
 </li>
 <li>
 
 The climate disclosure law drove carbon management and offsetting activity
 
 </li>
 <li>
 
 Collaborations were prominent in Alternative Energy, CCUS, and Hydrogen
 
 </li>
 </ul>
 
 
</div>

<div>
 <ul>
 <li>
 
 Regulation: 
 The US Government released 
 <a href="https://sp-edge.com/updates/29243">
 Sustainable Aviation Fuel (SAF) credit
 </a>
 eligibility guidelines, allowing producers whose fuel is at least 50% less polluting than petroleum jet fuel to receive a tax credit of USD 1.25&ndash;1.75 per gallon. Furthermore,
 f
 ollowing the adoption of the 
 <a href="https://sp-edge.com/insights/28480#:~:text=SEC%20approved%20climate,before%20being%20finalized.">
 US SEC climate disclosure law
 </a>
 last quarter, two more carbon market regulations were introduced: the US Government released the first 
 <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/05/28/fact-sheet-biden-harris-administration-announces-new-principles-for-high-integrity-voluntary-carbon-markets/">
 voluntary carbon credit market policy guidelines
 </a>
 and the EU Parliament adopted a new law to 
 <a href="https://climate.ec.europa.eu/eu-action/carbon-removals-and-carbon-farming_en#:~:text=On%2010%20April,while%20addressing%20greenwashing.">
 establish a carbon removal certification system
 </a>
 .
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Funding: 
 Next-gen Climate &amp; Energy startups raised only USD 1.5 billion in Q2 2024 (USD 7.5 billion in Q1 2024 and USD 3.3 billion in Q2 2023). Even if we exclude Q1&rsquo;s Northvolt&rsquo;s landmark 
 <a href="https://sp-edge.com/updates/26802">
 USD 5 billion
 </a>
 round, funding showed a decline in Q2; this was owing to declines in Alternative Energy (two-year low) and CMS (three-year low).&nbsp;
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Product updates:
 We observed 32 product updates in Q2 2024 (cf. 36 in Q1 2024). Notable world firsts included 
 <a href="https://sp-edge.com/updates/30683">
 Synhelion
 </a>
 launching the first industrial-scale plant to produce synthetic fuels from solar heat and 
 <a href="https://sp-edge.com/updates/28890">
 Lhyfe
 </a>
 launching the first green hydrogen marketplace.&nbsp;
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Partnerships:
 We observed 71 partnerships in Q2 2024 (cf. 70 in Q1 2024). 
 
 </li>
 </ul>
 
 
 
 <ul>
 <li>
 
 M&amp;A: 
 There were seven M&amp;A deals in Q2 2024 (cf. two in Q1 2024). Carbon management startups 
 <a href="https://sp-edge.com/companies/1625556">
 Sustain.Life
 </a>
 , 
 <a href="https://sp-edge.com/companies/1789938">
 Traace
 </a>
 , and 
 <a href="https://sp-edge.com/companies/1727803">
 Bluebird Climate
 </a>
 sought to integrate their solutions with carbon intelligence and reporting platforms to provide end-to-end emissions tracking, management, and disclosure solutions through consolidation.
 
 </li>
 </ul>
 
 
</div>

Next-gen Climate & Energy (Q2 2024): Alternative Energy and Carbon Management activity thrive despite funding slump

<div>
 
 
 <ul>
 <li>
 
 The US digital health sector closed with a record high funding of 
 USD 5.4 billion
 across 
 231 rounds
 in Q2 2024, up 39% QoQ
 
 </li>
 <li>
 
 Funding was dominated by 
 AI Drug Discovery
 startups, with overall focus shifting from primary care in Q1 to clinical development solutions in Q2
 
 </li>
 <li>
 
 GenAI
 
 and AI 
 continued to influence partnership activity and new products to accelerate drug discovery and clinical development
 
 </li>
 </ul>
 
 
</div>

Digital Health (Q2 2024): GenAI propels activity; funding skyrockets as AI Drug Discovery regains spotlight

<div>
 <ul>
 <li>
 
 Funding rebounded, driven by edge computing. Cloud optimization tools made a comeback
 
 </li>
 <li>
 
 IBM expanded cloud capabilities with HashiCorp acquisition
 
 </li>
 <li>
 
 Red Hat launched RHEL AI for open-source AI, while the edge computing sector saw numerous AI chip releases
 
 </li>
 <li>
 
 Edge AI ecosystem strengthened through partnerships aimed at GenAI deployment
 
 </li>
 </ul>
 
 
</div>

<div>
 
 Funding
 
 <ul>
 <li>
 
 Edge Computing mega rounds stood out: 
 Cloud Tech funding reached its highest in the past three years, raising USD 3.7 billion across 19 funding rounds (+4x QoQ and +1.5x YoY). Edge Computing accounted for ~82% of the total raised, led by 
 <a href="https://sp-edge.com/companies/51144">
 EdgeConneX
 </a>
 &rsquo;s (USD 1.9 billion) and 
 <a href="https://sp-edge.com/updates/28498">
 DataBank
 </a>
 &rsquo;s (USD 725 million) large-debt rounds to expand global data center capacity. Other Edge Computing startups 
 <a href="https://sp-edge.com/updates/29959">
 Yondr
 </a>
 , 
 <a href="https://sp-edge.com/updates/28115">
 Hailo
 </a>
 , and 
 <a href="https://sp-edge.com/updates/29003">
 Blaize
 </a>
 also raised USD 100+ million each, with a notable shift towards growth-stage rounds. Funding in Cloud-native Tech, Serverless Computing, and Cloud Optimization Tools saw significant gains, with Cloud Optimization Tools experiencing an exceptional 45x YoY growth.
 
 </li>
 </ul>
 
 Product updates
 
 <ul>
 <li>
 
 Red Hat launched RHEL AI:
 Red Hat Enterprise Linux AI (
 <a href="https://sp-edge.com/updates/29181">
 RHEL AI
 </a>
 ) enables the efficient, flexible deployment of AI models at the edge by providing optimized container images, hybrid cloud capabilities, and seamless integration with enterprise IT operations. It simplifies scaling AI across distributed edge environments, accelerating the adoption of AI-powered applications in resource-constrained, distributed settings.
 
 </li>
 <li>
 
 Focus on edge AI hardware innovation: 
 The edge AI landscape witnessed a flurry of new chip releases, with 
 <a href="https://sp-edge.com/updates/29739">
 EdgeCortix
 </a>
 , 
 <a href="https://sp-edge.com/updates/28101">
 Hailo
 </a>
 , and 
 <a href="https://sp-edge.com/updates/30099">
 Kneron
 </a>
 introducing advanced edge AI accelerators and servers. Incumbents like Intel and AMD also made significant advancements, with Intel launching edge-optimized 
 <a href="https://sp-edge.com/updates/28301">
 CPUs, GPUs, 
 </a>
 <a href="https://sp-edge.com/updates/28301">
 and
 </a>
 <a href="https://sp-edge.com/updates/28301">
 FPGAs
 </a>
 and AMD unveiling its 
 <a href="https://sp-edge.com/updates/28366">
 Versal adaptive 
 </a>
 <a href="https://sp-edge.com/updates/28366">
 SoC
 </a>
 . Alongside these hardware innovations, we noted numerous product announcements focused on enhancing Kubernetes adoption and capabilities in Cloud-native Tech.
 
 </li>
 </ul>
 
 Partnerships
 
 <ul>
 <li>
 
 Simplifying AI deployments and enhancing edge management:
 Collaboration between incumbents and disruptors aimed to simplify and enhance AI deployments and edge management. Noteworthy partnerships included 
 <a href="https://sp-edge.com/updates/29002">
 Vapor IO and VAST Data
 </a>
 integrating edge and core AI systems and Red Hat with 
 <a href="https://sp-edge.com/updates/29309">
 Intel
 </a>
 , 
 <a href="https://sp-edge.com/updates/29311">
 Cloudera
 </a>
 , 
 <a href="https://sp-edge.com/updates/29347">
 Veeam
 </a>
 , and Nutanix to bolster AI, security, and virtualization. Additionally, 
 <a href="https://sp-edge.com/updates/29818">
 Dell partnered with Nvidia
 </a>
 to accelerate edge AI adoption.
 
 </li>
 </ul>
 
 M&amp;A
 
 <ul>
 <li>
 
 IBM acquired HashiCorp: 
 IBM's acquisition of HashiCorp for 
 <a href="https://sp-edge.com/updates/28730">
 USD 6.4 billion
 </a>
 was a strategic move to enhance its hybrid cloud and AI capabilities. By integrating HashiCorp's tools into its Red Hat OpenShift platform, IBM plans to offer customers greater flexibility in cloud deployments. The combination of IBM's expertise (including 
 <a href="https://sp-edge.com/companies/6078">
 Red Hat
 </a>
 ) and HashiCorp's security and management solutions is expected to create a holistic platform tailored for the AI era, strengthening IBM's position in the rapidly evolving cloud and AI market.
 
 </li>
 <li>
 
 Cloud-native Tech and Serverless Computing dominate activity: 
 We tracked nine other M&amp;A deals, primarily in Cloud-native Tech and Serverless Computing. Harness bolstered its product portfolio by 
 <a href="https://sp-edge.com/updates/29964">
 acquiring Split Software
 </a>
 , further strengthening its acquisition-driven growth strategy. Other notable transactions included EQT's 
 <a href="https://sp-edge.com/updates/29112">
 purchase of WSO2
 </a>
 , Timescale's 
 <a href="https://www.prnewswire.com/news-releases/timescale-acquires-popsql-to-bring-a-modern-collaborative-sql-gui-to-postgresql-developers-302108558.html">
 acquisition of 
 </a>
 <a href="https://www.prnewswire.com/news-releases/timescale-acquires-popsql-to-bring-a-modern-collaborative-sql-gui-to-postgresql-developers-302108558.html">
 PopSQL
 </a>
 , and SUSE's 
 <a href="https://sp-edge.com/updates/30568">
 buyout of 
 </a>
 <a href="https://sp-edge.com/updates/30568">
 StackState
 </a>
 . 
 
 </li>
 </ul>
 
 O
 utlook
 
 <ul>
 <li>
 
 As the cloud and Edge Computing industries continue to evolve, several critical developments are shaping the landscape for GenAI adoption. Key players like Red Hat, SUSE, NVIDIA, AMD, and Intel have unveiled innovative products and platforms to enable the deployment of GenAI models across hybrid cloud and edge environments.
 
 </li>
 <li>
 
 Red Hat's RHEL AI and OpenShift AI, for instance, aim to make open-source AI more accessible and enterprise-ready, while partnerships between companies like VaporIO, Dell, and Red Hat are positioning them to capitalize on the GenAI revolution. Additionally, cloud optimization tools are increasingly incorporating AI-based features, such as Red Hat's &quot;Lightspeed&quot; and 
 <a href="https://sp-edge.com/companies/849470">
 CAST AI
 </a>
 's AI Advisor, to enhance cloud resource management and governance. 
 
 </li>
 <li>
 
 These developments suggest a growing focus on making GenAI more scalable, cost-effective, and user-friendly across diverse cloud and edge computing setups, potentially removing key bottlenecks.
 
 </li>
 </ul>
 
 
</div>

Cloud Tech (Q2 2024): Funding rebounds amid IBM’s HashiCorp and RHEL AI plays

<div>
 <ul>
 <li>
 
 Overall activity witnessed a marginal increase during Q2 2024 
 
 </li>
 <li>
 
 The race for healthcare AI models heated up
 
 </li>
 <li>
 
 Retailers retreat amid profitability constraints
 
 </li>
 </ul>
 
 
</div>

<div>
 <ul>
 <li>
 
 The race for healthcare AI models heated up: 
 During the quarter, Alphabet, through Google and DeepMind, 
 <a href="https://www.fiercehealthcare.com/ai-and-machine-learning/googles-med-gemini-surpasses-industry-standards-ai">
 released
 </a>
 an 
 <a href="https://arxiv.org/pdf/2404.18416">
 open-access paper
 </a>
 on Med-Gemini, a family of large multimodal models (LMMs) specifically built for the healthcare domain. In this release, Google claimed that Med-Gemini is more accurate than any other LMM on the market, including GPT-4, and can reduce the cognitive load for clinicians by efficiently extracting and analyzing information from vast amounts of patient data. Meanwhile, 
 <a href="https://sp-edge.com/companies/5">
 Meta
 </a>
 's open-source large language model (LLM), Meta Llama 3, 
 <a href="https://hitconsultant.net/2024/06/04/meta-llama-3-on-nvidia-boosts-healthcare-innovation-with-open-source-ai/">
 gained traction
 </a>
 during the quarter as healthcare and life science sectors showed interest in exploring its possibilities to improve patient lives.
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 <a href="https://sp-edge.com/companies/1658">
 Apple
 </a>
 made headlines, as its Vision Pro was used during a shoulder replacement surgery: 
 eXeX, an AI-enhanced surgical logistics software company, made history by 
 <a href="https://hitconsultant.net/2024/04/03/apples-vision-pro-makes-history-in-first-ever-use-during-shoulder-replacement-surgery/">
 incorporating
 </a>
 the Vision Pro spatial computing headset during a reverse total shoulder arthroplasty. The eXeX software, integrated with Vision Pro, provided holographic access to surgical information, improved workflow and equipment management, and enabled touch-free interaction without compromising sterility. This demonstrates the potential of AI and spatial computing to enhance surgical procedures, improve efficiency and accuracy, and ultimately, patient outcomes.
 
 </li>
 </ul>
 
 
 
 <ul>
 <li>
 
 Walmart and Walgreens announced the scaling down of healthcare businesses: 
 During Q2 2024, Walmart announced 1) the intention to shut down Walmart Health and Walmart Health Virtual Care, stating they were not financially sustainable, and 2) the 
 <a href="https://sp-edge.com/updates/30933">
 sale
 </a>
 of MeMD to Fabric for an undisclosed amount. This marked the exit of the retail giant from the virtual health market due to pressures of financial sustainability. Walgreens also announced intentions to reduce its stake in primary care clinic chain VillageMD and to 
 <a href="https://www.beckershospitalreview.com/disruptors/walgreens-to-close-significant-number-of-underperforming-stores.html">
 close
 </a>
 a &ldquo;significant&rdquo; number of underperforming stores over the next 3 years. 
 
 </li>
 </ul>
 
 
</div>

Tech & retail giants in healthcare (Q2 2024): Retailers pullback; Big Tech keeps momentum

<div>
 <ul>
 <li>
 
 Overall funding volumes increased from a surge in mega deals
 
 </li>
 <li>
 
 Continued adoption of AI-powered products witnessed across multiple industries
 
 </li>
 <li>
 
 Enhancing products and strengthening market presence were key motives for M&amp;A deal-making
 
 </li>
 </ul>
 
 
</div>

<div>
 
 This Edge Insight focuses on notable activities related to the sectors covered by SPEEDA Edge under the FinTech vertical from April 2024 to June 2024 (Q2 2024): FinTech: Banking &amp; Infrastructure, FinTech: Blockchain, FinTech: Payments, Wealth Tech &amp; Sustainable Finance, and InsurTech.
 
 <hr/>
 <h1>
 Key takeaways
 </h1>
 <ul>
 <li>
 <h3>
 Regulations
 </h3>
 <ul>
 <li>
 
 Buy now, pay later (BNPL) providers to face similar regulatory scrutiny as credit card issuers: 
 During the quarter, regulatory updates have primarily targeted BNPL
 providers
 due to the increasing consumer adoption of such offerings. The 
 <a href="https://sp-edge.com/updates/29696">
 US Consumer Financial Protection Bureau
 </a>
 (CFPB) and the 
 <a href="https://sp-edge.com/updates/30179">
 Australian Government
 </a>
 introduced new laws 
 tightening oversight to levels similar for credit card issuers
 . These regulations are expected to 
 enhance consumer confidence
 in BNPL by ensuring 
 better protection 
 and further 
 accelerating their adoption.
 Meanwhile, in the 
 cryptocurrency 
 and
 digital assets space
 , the US House of Representatives passed legislation 
 governing digital assets and
 
 preventing CBDC issuance 
 by the Federal Reserve without authorization.
 
 </li>
 </ul>
 </li>
 </ul>
 
 
 <ul>
 <li>
 <h3>
 Funding
 </h3>
 <ul>
 <li>
 
 Overall funding volumes increased from a surge in mega deals: 
 The FinTech sector experienced an increase in funding volumes in Q2 2024, marking 
 three consecutive quarters
 of growth. The sector raised 
 USD 6.2 billion
 , representing a 
 90% YoY
 and 
 18%
 
 QoQ
 increase. This was fueled by a higher count of 
 mega deals 
 completed during the quarter (20 compared to 9 in Q2 2023)&mdash;particularly within 
 Neobanks
 , which accounted for 
 six
 such deals&mdash;collectively raising nearly 
 USD 4.6 billion 
 (~74%) of the total funds raised during the quarter. 
 <a href="https://sp-edge.com/companies/1343919">
 Abound
 </a>
 , a UK-based digital lender, raised the highest amount, 
 totaling 
 <a href="https://sp-edge.com/updates/31021">
 GBP 800 million
 </a>
 (~USD 1 billion)
 in Series B equity and debt funding, with the funds earmarked to expand its lending portfolio and launch its AI-powered credit decision-making platform.
 
 </li>
 </ul>
 </li>
 </ul>
 
 
 <ul>
 <li>
 <h3>
 Product updates
 </h3>
 <ul>
 <li>
 
 Integration of AI capabilities and diversification of business lines across industries: 
 During Q2 2024, we counted 11 product updates (vs. 10 in Q1 2024) related to AI. These AI product launches were prominent in 
 Business Expense Management
 , 
 Capital Markets Tech
 , and 
 InsurTech: Infrastructure
 , helping customers optimize and automate their operations and enhance their offerings. Incorporating AI across the value chain 
 is becoming a key priority for FinTech companies,
 with investments in this area only expected to increase. Other product launches focused on 
 complementing existing offerings
 ,
 entering new markets
 , and 
 diversifying operations
 , such as 
 <a href="https://sp-edge.com/companies/677824">
 Mercury
 </a>
 venturing into personal banking and pet insurer 
 <a href="https://sp-edge.com/companies/2244080">
 Kanguro
 </a>
 entering the renters&rsquo; insurance market. 
 
 </li>
 </ul>
 </li>
 </ul>
 
 
 <ul>
 <li>
 <h3>
 Partnerships
 </h3>
 <ul>
 <li>
 
 Launching complementary products and enhancing existing product portfolios drove partnership activity:
 Partnership activity remained elevated during the quarter as FinTech companies aimed to 
 innovate
 and 
 enhance
 their product portfolios, facilitating entry into new markets. Meanwhile, 
 AI-related
 collaborations were witnessed across industries, particularly within 
 Neobanks, Capital Markets Tech, 
 and
 InsurTech: Infrastructure.
 Incumbents, in particular, saw a surge in partnership activity, up 72% QoQ, accounting for over 50% of all activities. 
 <a href="https://sp-edge.com/companies/13283">
 Mastercard
 </a>
 stood out during this period, leveraging its infrastructure, including open-banking solutions, through partnerships with FinTech companies to introduce new products and extend market reach.
 
 </li>
 </ul>
 </li>
 </ul>
 
 
 <ul>
 <li>
 <h3>
 M&amp;A
 </h3>
 <ul>
 <li>
 
 Enhancing products and strengthening market presence were key motives for M&amp;A deal-making: 
 We counted 
 22 M&amp;A transactions
 within the FinTech sector in Q2 2024 (vs. 15 in Q1 2024). Most were centered around 
 enhancing existing product offerings
 and 
 strengthening their market presence 
 by acquiring companies that provide complementary services. The most valuable deal was 
 <a href="https://sp-edge.com/companies/151258">
 AlphaSense&rsquo;s
 </a>
 acquisition of 
 <a href="https://www.tegus.com/blog/alphasense-to-join-forces-with-tegus-increases-latest-valuation-to-4b">
 Tegus
 </a>
 for USD 930 million; the integration of offerings sought to provide customers with improved insights into capital markets and strengthen AlphaSense&rsquo;s position against industry giants like Bloomberg.
 
 </li>
 </ul>
 </li>
 </ul>
 
 
 <ul>
 <li>
 <h3>
 Outlook
 </h3>
 <ul>
 <li>
 
 Adoption of AI and GenAI technologies is expected to continue as companies seek to improve efficiencies and gain competitive advantage: 
 As 
 <a href="https://sp-edge.com/industry/163">
 GenAI applications
 </a>
 continue to disrupt the market, the FinTech sector is poised for significant integration of this technology, including AI. Recent product launches and partnerships have heavily focused on enhancing the FinTech infrastructure layer. We anticipate that more FinTech companies will integrate these products into internal workflows and customer-facing operations to improve efficiency, enhance services, and better serve customers. Immediate applications of these technologies are expected to include developing chatbots to gain insights from proprietary and customer data and improve customer service. Companies are ramping up investments in these areas, as indicated by a 
 <a href="https://kpmg.com/kpmg-us/content/dam/kpmg/pdf/2023/the-gen-ai-advantages-in-financial-services.pdf">
 survey
 </a>
 where over 40% of financial service executives anticipate a more than 50% increase in GenAI investments.&nbsp;
 
 </li>
 <li>
 
 Funding volumes to gradually recover in 2024: 
 Funding volumes have increased consistently in Q1 and Q2 2024, and this momentum is expected to continue throughout 2024. This growth is driven by expectations of a 25-basis-point rate cut in 2024, which is anticipated to act as a catalyst for funding across the FinTech industry. Additionally, startups are expected to seek more funding to expand operations as their cash reserves diminish following efforts to conserve funds. Focus on operating efficiency and profitability will also increase, as VC funding will likely favor companies that score high.
 
 </li>
 <li>
 
 Startups to focus on IPO readiness: 
 Following a sluggish 2023 for FinTech IPOs&mdash;characterized by reduced valuations&mdash;many startups and investors are now eyeing public listing as market conditions improve, especially with the expected relaxation of monetary policy, which can have a tailwind effect on valuations. Companies such as 
 <a href="https://sp-edge.com/updates/27565">
 eToro
 </a>
 , 
 <a href="https://sp-edge.com/updates/27044">
 Klarna
 </a>
 , 
 <a href="https://sp-edge.com/updates/27295">
 Monzo
 </a>
 , 
 <a href="https://sp-edge.com/updates/27220">
 WeBull
 </a>
 , and 
 <a href="https://sp-edge.com/updates/27702">
 Zilch
 </a>
 have announced plans to go public within 12&ndash;24 months. Moreover, an increase in M&amp;A activities within the sector is likely driven by investors seeking opportunities in distressed assets or companies looking to consolidate market share.
 
 </li>
 </ul>
 </li>
 </ul>
 
 
</div>

EDGE Insights