- Jefferies hosted a conference that brought together late-stage technology founders, investors, and bankers.
- At the conference, there was talk about the revival of IPOs and M&A.
- Jefferies has significantly expanded its technology investment arm in recent years.
There was a cheerful mood at the seaside closing dinner of the Jefferies Private Internet Conference this week, as bankers and venture capitalists nibbled on caviar sushi and drank champagne and sake at Nobu Malibu.
IPOs and M&A are finally back, along with an exciting new catalyst for rising technology valuations: generative AI.
“We surveyed 140 entrepreneurs, many of whom come here, and found that 'IPO' is no longer a dirty word,” said Cameron Jeffries, co-head of Jefferies' technology, media and telecom investment banking practice. ” he said. “People are thinking maybe it will go public.”
After a pause due to the coronavirus, Jefferies will bring the conference back in 2022, bringing together late-stage technology founders, investors, and bankers. However, there was not much talk about the actual transaction. Now, the traffic jams are finally clearing up.
“Today is just as busy as 2021,” said Jason Greenberg, co-head of global technology, media and telecom investment banking at Jefferies.
“Ultimately, we are successful and we are rewarded by the success of closing and closing deals, with more of the deals in progress going forward in 2024 or early 2025 than in 2021. I don't think it will change. But even if it doesn't, closing at the same rate would be a huge recovery for a market that was down 60% from peak to trough.”
Greenberg says many of these transactions are powered by AI. The theme of this year's conference was “In the Age of AI.”
“Beyond general deal considerations, AI is emerging as the new biggest influence in technology M&A today,” Greenberg said.
Reports that Salesforce is in talks to acquire data management software company Informatica for $10 billion are another sign that deals are back (although some conference attendees said they are not sure if a deal will ultimately happen). (Some people were skeptical that it would succeed.)
There was also good news this week, with Goldman Sachs reporting that fees in its investment banking division rose 32% in the first quarter, driven by strong growth in underwriting and advisory services.
“It's clear that we are in the early stages of reopening our capital markets,” David Solomon, the bank's chairman and CEO, told investors.
Reddit went public in March, but its stock price has fallen since its initial price. Other companies in the IPO pipeline include his Databricks. Epic Games and Getir.
In addition to a sumptuous Nobu dinner, Jefferies attendees heard from Marc Andreessen, co-founder of Andreessen Horowitz, and Neerav Kingsland, head of business development at Anthropic.
Jefferies has significantly expanded its technology investment arm to better compete with more established companies like Goldman and JPMorgan Chase & Co.
“In the past 18 months, we have increased the number of MDs. [managing directors] We've had a 70% increase in our investment bank, which is kind of crazy considering what's happened to our industry in terms of decline over the past few years,” Lester said.
Now, with trading finally starting to resume, Lester hopes his investment will pay off.
“Typically people don't choose a banker in 30 days,” Lester said. “They choose it based on the relationships they've built over the years.”
