Analyzing B2B Technology Vendor Adoption Trends for TAM Analysis and Deal Sourcing

Partner content produced in association with Neudata

Technology-focused companies are, more than ever, able to understand their Total Addressable Market to make more informed decisions to help them accelerate revenue growth. AlphaWeek’s Greg Winterton spoke to Andy McBride, Director, Business Development and Partnerships at HG Insights, to learn more about how this impacts private markets investors.

GW: Andy, understanding the TAM (Total Addressable Market) is good practice for any company. What are some of the nuances most relevant to PE and VC firms here?

AM: Whether you’re looking to generate investment ideas, perform financial analysis, or conduct risk assessments on companies and sectors across the globe—understanding your TAM is a must.

In many industries and applications, understanding TAM is fairly straightforward but as we all know, this is not the case for PE and VC companies. These firms are not always looking for information that’s available to the public. More frequently, it’s the opposite, they’re looking for information that is closely guarded.

TAM insights impact every aspect of private markets: deal sourcing, commercial due diligence, portfolio operations, market research. The list goes on. And that’s why it’s so important to have good intel. TAM can give you an outside-in view of a company, an early look behind the curtain.

GW: Sales and revenue generation takes more than just smiling and dialling nowadays. How can alternative data help a portfolio company – and in turn the PE/VC investors – better target prospects?

AM: The days of cold calls and tepid leads are long gone. Now, if you’re not using data to drive insights and analysis, you’re at a huge disadvantage.

The market for alternative data, which, in the context of private markets, is everything from credit card information to job postings, is growing fast; the data is scraped from billions of sources each month, providing a wealth of information. As I mentioned, this data helps you understand your Total Addressable Market, but that’s just a starting point; your Serviceable Addressable Market, or SAM, is the segment of the market you can reasonably hope to address within the confines of your team, your business, and your technology. TAM analysis has evolved into SAM as the sector evolved to provide more detail on market opportunities. As you go further down the funnel, you get to your Serviceable Obtainable Market, or SOM. Insights like these enable portfolio companies’ sales and marketing teams to prioritize the right markets and accounts that will drive more revenue, faster.

GW: What about the deal sourcing effort? How is this kind of data helping PE and VC firms with screening?

AM: PE and VC firms have a range of needs: finding new signals to monitor, tracking net new customer growth and overall trajectories to name but a few. It’s not a one size fits all situation. But the path to all these answers is paved with data. Private markets investors are using data to evaluate deal opportunities and perform comparables analysis with data on private companies from around the world; they are now monitoring the longevity of PE investments, assessing company growth trajectories and tracking down all the financial and non-financial metrics they need. PE and VC firms that are using alternative data in their deal sourcing efforts are simply making better, more informed investments.

Andy McBride is Director, Business Development and Partnerships at HG Insights. He will be presenting ‘Analyzing B2B Technology Vendor Adoption Trends For TAM Analysis And Deal Sourcing’ at the Neudata Summer Online Summit at 12.30pm ET / 5.30pm GMT on Thursday, June 17th. Click here for more information and to register