Oversupply in BattMats Leads to 80% Fall in Lithium Price in 1 Year

Lithium, a key raw material in batteries for electric vehicles, has fallen in price, with oversupply and a scaling back in EV production forecasts. 

Lithium carbonate trades at around 95 000 CNY/tonne from around almost but not quite 500 000 CNY/tonne at the same point last year. Its absolute peak was in November 2022 at just over 600 000 CNY/tonne. 

At the time of this update, 1 USD buys 7.18 CNY.

China is the world's largest electric vehicle market, where EV penetration continues to grow but at a slower rate. At the end of 2023, Goldman Sachs cited the trend in a report entitled "The Short Trade Must Go On" highlighting both supply and demand drivers.

For a good introduction to lithium's role in the energy transition, the following report from IRENA (the International Renewable Energy Agency) is worth reading.

Clearlake and Insight to Acquire Alteryx for $4.4bn

Clearlake Capital Group LP with Insight Partners (co-founded by Colorado-based Twitter investor Jerry Murdock) have agreed to acquire Irvine, CA-based Alteryx (NYSE:AYX), a cloud analytics platform company, in a $4.4bn definitive agreement. Regulatory and stockholder approvals are required.  Alteryx will then become a privately held portfolio company of Clearlake and Insight.

Competitors of Alteryx include Tableau, DataDog and even Microsoft Power BI. 

DataDog has more of a niche around cloud infrastructure metrics and supports AWS, Azure, GCP, RedHat OpenShift and VMWare amongst others and raised substantial capital in a Series D funding round led by ICONIQ Capital.

Activist Investor Defence at Disney - Gorman Appointment

Morgan Stanley boss James Gorman is one of two executives nominated for appointment to Disney's board to shore up strength to defend against activist shareholder, to take effect February 2024.This was done after a "lengthy and comprehensive search". Former Group CEO of Sky, Jeremy Darroch, is the other nominee.

Software to Dominate Technology Dealmaking - PwC

The great technology protagonist PwC expects software deals to dominate Tech M&A in 2H23, making up 70% of deals in 1H23. The appeal is the subscription based business model. The next biggest area is IT services, including cybersecurity, DevOps, digital transformation and low code segments.

PE still relishes Tech companies. Some big examples:

• Thoma Bravo's $8bn acquisition of San Mateo based Coupa Software (a business spend management platform which is "more than it seems" having grown through acquisitions, an interesting one being Llamasoft), which closed in February 2023 (Vista Equity Partners, the second-in-line bidder, lost out).

• Acquisition of  events technology company Cvent by Blackstone and the Abu Dhabi Investment Authority, as well as existing stockholder Vista Equity Partners, for $4.6bn announced in March 2023 and closed in June 2023, leading to removal of its ticker CVT from the Nasdaq. Cvent was founded by legal eagle Reggie Aggarwal in 1999 and went public in 2013. It was subsequently taken private by Vista Equity Partners in 2016 for $1.65bn. It was then "Nasdaq'ed" in December 2021 before the latest take-private initiative from Blackstone.

AI and large language models are an emerging theme following the launch of ChatGPT in November 2022, GPT standing for generative pre-trained transformer.

Chuck's Cisco Buys Splunk for A Whopping $28bn

This is Cisco's largest ever acquisition. 

The networking giant is metamorphosing into a software giant by acquisition.  

SF based Splunk brands itself as a leader in cybersecurity and observability (the security part being a post facto addition/evolution of the core log management product) with a touch of AI thrown into the mix. You could even say it enables "security observability" in an "AI friendly way".

Splunk's Burlingame-based chief executive Gary Steele who came from cybersecurity firm Proofpoint (formerly a Nasdaq-traded security-as-a-service company, taken private by Thoma Bravo in 2021 at a valuation of $12.3bn), will now report into Cisco's Chief Executive Chuck Robbins (who took on the mantle handed down by Cleveland, Ohio-born John T Chambers in 2015 who held the position for 20 years - and was incidentally also Chuck's mentor!).

Steele's new boss Chuck Robbins has a mathematics degree (from UNC-Chapel Hill) and started his career as an application developer at a bank (which was later integrated into Bank of America).

This acquisition is fundamental in that it exposes Cisco to subscription-based software revenue. 

Quinton Gabrielli (Piper Sandler) also observed it fills a hole for Cisco which has been struggling to expand its business. The acquisition announcement comes around a week after Cisco announced it was acquiring PINACL a firewall policy management solution developed within Goldman Sachs and propped up by GS Accelerate.

In August 2023, Cisco also acquired BGP Monitoring company, Code BGP, based in Greece.

Tesla in Talks to Invest in India

The EV market in India boasts three major players, Tata Motors, with its Nexon EV Model (whose engine is developed by Tata and Austrian firm AVL), MG Motors (Chinese-owned brand since 2005) and BYD. Tesla has strong growth ambitions aiming to sell 20 million cars globally by 2030 and building cars in India for the local market and export would go some way to achieving these goals. It has faced challenges expanding its Shanghai base where it operates a Gigafactory (its first overseas Gigafactory) due to Musk's adjacent involvement in SpaceX and potential military implications of its Starlink satellite network which currently has 4,000 satellites in low earth orbit.

AI Funding Soars with Inflection AI Raising $1.3bn

Launched in 2022, Inflection AI, based in Palo Alto, already has a product - Chatbot Pi. 

It has raised £1.3bn in funding and is valued at $4bn.  This has happened less than 2 months after the launch of Chatbot Pi. 

CEO Mustafa Suleyman said the company's core thesis is that "conversation is the new interface". CNBC paraphrased declaring Inflection would make it "easier for humans to communicate with computers".

Reid Hoffman of LinkedIn fame, who has a deeply technical background, is a backer (Reid was also a founding investor in Open AI), and teaches the Stanford University class "Blitzscaling".

The latest funding round puts Inflection in the category of 4th largest AI funding round to date, the largest being OpenAI which raised $10bn in Jan 2023.

Earlier big bucket rounds include Argo AI at $2.6bn in December 2019 (a former autonomous vehicle company backed by Ford and Volkswagen) and Cruise (autonomous vehicle firm, run by Kyle Vogt who doubles as CEO and CTO) at $2bn in Jan 2021. HK AI provider SenseTime kicked off the trend in September 2018 with a $1bn funding round.

For Cruise, things are a little more complicated as it operates as a subsidiary of General Motors and hence has sizable credit facilities from its parent company in addition to regular funding.