The Hidden Player in the Semiconductor Boom

If you’ve never thought about investing in IT services, this podcast episode could change your mind. Sands Capital Sr. Research Analyst Eric Black takes you through the investment case for Globant, the world’s largest pure play design-first digital services provider. Asset-light businesses such as Globant can be hard to evaluate, but the opportunities in the 1.5 trillion market of IT Services are undeniable. Eric helps us see why, unpacking the potential of AI, Globant’s strategic business partnerships, and the loyalty the company has generated from the more than 1,500 Fortune 500 and Fortune 2000 companies on its client list. Globant’s cutting-edge software solutions have made their way into products at Disney, ESPN, and Google and are making lives easier around the globe. Episode Transcript Available Here(01:50) Not a labor-cost arbitrage model(03:44) The Disney Magic Band. The Globant product you’ve probably already seen.(05:14) Tech companies don’t do everything in-house. Enter: Globant.(06:59) What makes Globant a growth business?(08:41) A Thought Leader in AI for the last decade and MaganifAI(11:45) The research process into digital transformation(14:31) A one-size-fits-all all approach would be antithetical to the way Globant operates(18:26) The pandemic boost and a global presence(21:51) “Value-added focus” and the power of a leader(25:10) The competitive moat for a huge market and Globant’s potential advantages(28:24) Competitors have the same advantages? Why we like Globant’s pure play angle.(31:19) The disruptors lying in wait(34:21) Staffing costs and flexing to keep margins high and remain profitable(36:25) Researching a company operating in intangibles: what’s different?(39:04) The portfolio managers visit Buenos Aires(40:44) From “why would you invest” to “what’s the insight”?(43:04) Responsible investing in human capital, labor rights and gender diversity(44:49) Nefarious digital technology and cybersecurity - Globant’s response.(49:26) Under the radar companies and enablers of big trends can make for great investments(52:56) Quick recap of Season 2 episodesRelated content from Sands Capital⁠Sign up to receive our monthly Perspectives newsletter: ⁠Our latest thinking on innovation investing, long-term capital, and cultureIn case you missed it: What Matters Most Episode 6: Revolutionizing Public Safety: The Axon Ecosystem⁠Catch our most popular episodes from this season:⁠Kaspi: The Super App Reshaping Kazakhstan’s Financial LandscapeInside Cadence: The Software Powering Semiconductor Breakthroughs⁠Follow What Matters Most⁠ wherever you listen to podcasts and never miss an episode.Learn more about ⁠Sands Capital⁠, sign up for ⁠our newsletter⁠, and ⁠follow us on LinkedIn⁠.Review our podcast season and episode disclosures ⁠here⁠.

As artificial intelligence (AI) becomes a part of oureveryday lives, making sure it’s transparent and unbiased has become a high priority for businesses, governments, and ordinary people. In this episode of What Matters Most, Scott Frederick, a Sands Capital managing partner, explains howsoftware startup Credo AI is helping to keep AI models responsible. Join us as we look at how Credo AI aims to lead the way  in this vital new field. Show Notes:(2:10) AI Has Evolved Over Decades(4:48) Responsible AI vs. Ethical AI(9:29) Simplifying AI Governance with Credo AI(14:10) Can Agents and Artificial Superintelligence beTransparent?(18:27) Solving the Alignment Problem(20:16) Industries Ripe for Credo AI’s Solution(22:14) Market Timing and Other Potential Headwinds(24:53) How Big of a Market Could AI Governance Be? Review our podcast season and episode disclosures ⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠. Learn more about ⁠⁠⁠⁠Sands Capital⁠⁠⁠⁠, sign up for ⁠⁠⁠⁠our newsletter⁠⁠⁠⁠, and ⁠⁠⁠⁠follow us on LinkedIn⁠⁠⁠⁠.

In this episode of Season 3 of What Matters Most, Sands Capital’s Eduardo Leal explains how Brazil’s Nubank went from startup to the country’s second largest corporation in just 10 years — and the company’s digital-first banking platform.  Join us as we explore how mobile banking is opening financial doors for global citizens and how we believe Nubank is poised to remake the Brazilian banking industry. Show Notes (2:23) The State of Banking for 700 million Latin Americans (4:32) Founder David Vélez’ Story (7:32) How NuBank Serves a Fundamental Need (10:48) A Lean, Mean Business Model (13:45) Overcapitalization: A Good Problem to Have (17:06) How Sands Capital First Spotted NuBank (18:46) Potential Risks to Future Growth (21:01) Could NuBank Expand Beyond Latin America? (22:29) The Next 10 Years Review our podcast season and episode disclosures ⁠⁠⁠⁠here⁠⁠⁠⁠. Learn more about ⁠⁠⁠Sands Capital⁠⁠⁠, sign up for ⁠⁠⁠our newsletter⁠⁠⁠, and ⁠⁠⁠follow us on LinkedIn⁠⁠⁠.

In our first episode of season 3’s What Matters Most, Sands Capital’s Emerson Bluhm explains why Samsara’s integrated hardware and software technology continues to gain market share and why this investment opportunity is aligned with Sands Capital’s philosophy. Join us as we explore the future of real-world operations and why Samsara is poised to become a leader of this ~$4 billion North American market. Show Notes (1:17) From Private Funding to Public Success (3:50) A Software Company that Knows Hardware (4:43) Why Physical Operations is Ripe for Disruption (6:54) Leadership with a Proven Track Record (11:04) The Value of Samsara’s Integrated Platform (16:17) ‘AirTags’ for Cranes, Tools and Everything in Between (19:44) Third-party Integrations and Realtime Decision-making (21:07) Return-on-investment for End Users (22:34) Samsara’s Long-term Growth Potential (24:13) The Stickiness Subscription-based Revenue Learn more about ⁠⁠Sands Capital⁠⁠, sign up for ⁠⁠our newsletter⁠⁠, and ⁠⁠follow us on LinkedIn⁠⁠. Review our podcast season and episode disclosures ⁠⁠here⁠⁠.

You’ll find semiconductors in just about every device with a plug, a power button, or a battery. In this episode of What Matters Most, Sands Capital research analyst Daniel Pilling explains why Entegris, a critical player in the global semiconductor industry, is seeing rapid growth as the demand for artificial intelligence (AI) and machine learning intensifies. Transcript available here. (00:01:37) From vacuum tubes to artificial intelligence (AI) in 80 years—a quick history of semiconductors (00:04:51) How small is a nanometer really? Moore’s Law in action, shrinking chip circuitry. (00:07:33) Exponential complexity in chipmaking. Skyscrapers and bread? (00:09:00) But actually, how do you make a semiconductor? (00:15:18) Entegris: chemicals or technology analysts? Who covers it and why? (00:18:56) “One throat to choke”? And the chokepoint explained. (00:26:28) Why consumables have less “lumpy” capital expenditures (00:26:51) Chips that power EVs [electric vehicles] (00:30:22) Don’t bet on the winner in this market, and what to do instead. (00:33:57) Advantages and industry talent finding an employer of choice (00:40:32) The iPhone moment and where AI is going from here (00:42:17) Outlook for Entegris and semiconductor growth Related content from Sands Capital ⁠⁠Sign up to receive our monthly Perspectives newsletter: ⁠⁠Our latest thinking on innovation investing, long-term capital, and culture More from Daniel Pilling: Gen AI: Hype or Megatrend, Inside Cadence: The Software Powering Semiconductor Breakthroughs Season 3 is now live! Samsara: Steering the Future with Integrated Fleet Technology Catch our most popular episodes from last season: ⁠⁠Globant Takes A Design-First Approach to Pure Play Digital Service⁠⁠ ⁠⁠⁠Revolutionizing Public Safety: The Axon Ecosystem⁠⁠⁠ Kaspi: The Super App Reshaping Kazakhstan’s Financial Landscape ⁠⁠Follow What Matters Most⁠⁠ wherever you listen to podcasts and never miss an episode. Learn more about ⁠⁠Sands Capital⁠⁠, sign up for ⁠⁠our newsletter⁠⁠, and ⁠⁠follow us on LinkedIn⁠⁠. Review our podcast season and episode disclosures ⁠⁠here⁠⁠.

Nearly every factory has room for more automation, with greater penetration in existing industries and expansion into new industries expected over the next decade. Sands Capital’s Suni Thakor and Danielle Menichella discuss why Keyence, a factory automation market leader that specializes in sensor and sensor systems, will likely be a beneficiary of that growth and what makes the company so unique within its sector. Transcript available here. (01:41) Reasons for factory automation (03:08) Why Keyence is special (05:20) Keyence’s attractive business space and high margins (07:09) Trends in global automation (08:54) Future sources of Keyence’s growth (09:49) Impact of supply chain issues on Keyence (12:48) Incorporating a business in the portfolio (17:14) Frontline research on the company and the industry (18:59) Portfolio managers and research analysts work together (20:35) What’s a “cobot”? (21:39) Keyence’s approach to ESG (24:04) Suni on the importance of conviction for investment professionals Related content from Sands Capital ⁠⁠Sign up to receive our monthly Perspectives newsletter: ⁠⁠Our latest thinking on innovation investing, long-term capital, and culture. Season 3 is now live! • ⁠Samsara: Steering the Future with Integrated Fleet Technology⁠ In case you missed it: What Matters Most Episode 11: ⁠Unearthing Value: A Deep Dive Into Titan, India’s Jewelry Giant Catch our most popular episodes from Season 2 ⁠Globant Takes A Design-First Approach to Pure Play Digital Service⁠⁠ ⁠⁠⁠Revolutionizing Public Safety: The Axon Ecosystem⁠⁠⁠ Kaspi: The Super App Reshaping Kazakhstan’s Financial Landscape ⁠⁠Follow What Matters Most⁠⁠ wherever you listen to podcasts and never miss an episode. Learn more about ⁠⁠Sands Capital⁠⁠, sign up for ⁠⁠our newsletter⁠⁠, and ⁠⁠follow us on LinkedIn⁠⁠. Review our podcast season and episode disclosures ⁠⁠here⁠⁠.

In this episode of What Matters Most, we delve into the world of Titan, India’s leading jewelry and watch retailer, with Sands Capital Sr. Research Analyst Massimo Marolo. Explore the cultural significance of gold in India, the dynamics of the fragmented jewelry market, and Titan’s advantages as a trusted, vertically integrated brand. The conversation highlights Titan’s potential to further consolidate the industry and increase its market share as well as its commitment to sustainability and ethical sourcing in its gold supply chain. Tune in to discover how Titan is shaping the future of jewelry retail in India. Episode Transcript ⁠Available Here⁠. (1:14) The Promising Business Space of the Indian Jewelry Industry (2:34) Titan's Advantage as a Trusted Brand (5:18) Differentiating Titan from Unorganized Mom-and-Pop Jewelers (17:09) Cultivating Relationships and Localized Designs (26:04) Vertical Integration and Staying Ahead of Trends (31:24) Sustainability and Ethical Sourcing Related content from Sands Capital ⁠Sign up to receive our monthly Perspectives newsletter: ⁠Our latest thinking on innovation investing, long-term capital, and culture. In case you missed it: What Matters Most Episode 10: Placing Bets on Innovation: Flutter's Revolution in Online Gambling Catch our most popular episodes from this season: Globant Takes A Design-First Approach to Pure Play Digital Service⁠ ⁠⁠Revolutionizing Public Safety: The Axon Ecosystem⁠⁠ ⁠Follow What Matters Most⁠ wherever you listen to podcasts and never miss an episode. Learn more about ⁠Sands Capital⁠, sign up for ⁠our newsletter⁠, and ⁠follow us on LinkedIn⁠. Review our podcast season and episode disclosures ⁠here⁠.

Dive into the dynamic world of online sports betting in this episode of What Matters Most. We sit down with Katherine Bates, research analyst at Sands Capital, to discuss the rise and strategies of Flutter, the world's largest online sportsbook and gaming operator. Discover how Flutter is leveraging technology, regulatory changes, and a deep understanding of customer behavior to redefine the betting experience. From the intricacies of in-game betting to the challenges of responsible gambling, this episode offers a compelling glimpse into the high-stakes world of online betting. Tune in to learn more about Flutter's growth formula and its potential impact on the future of global online gambling. Episode Transcript ⁠⁠Available Here⁠.⁠ (2:15) Flutter's Expansion, Mobile Penetration and Convenience (4:07) Flutter's Innovation in Parlay Betting (6:35) Flutter's Position in the Industry (9:26) Flutter's Advantage in Odds Pricing (12:04) The Other Players in the Space (17:10) Customer Acquisition and Competitive Advantages (24:10) Addressing Problem Gambling (31:32) Licensing Fees and League Relationships Related content from Sands Capital Sign up to receive our monthly Perspectives newsletter: ⁠Our latest thinking on innovation investing, long-term capital, and culture. In case you missed it: What Matters Most Episode 9: ⁠Kaspi: The Super App Reshaping Kazakhstan's Financial Landscape Catch our most popular episodes from this season: ⁠Globant Takes A Design-First Approach to Pure Play Digital Service⁠ ⁠⁠Revolutionizing Public Safety: The Axon Ecosystem⁠⁠ ⁠Follow What Matters Most⁠ wherever you listen to podcasts and never miss an episode. Learn more about ⁠Sands Capital⁠, sign up for ⁠our newsletter⁠, and ⁠follow us on LinkedIn⁠. Review our podcast season and episode disclosures ⁠here⁠.

Explore digital innovation in Kazakhstan in this episode of What Matters Most, in which we spotlight Kaspi’s compelling super app ecosystem, which boasts nearly 70% of the country’s adult population as daily active users. Sands Capital Research Analyst Brian Crofton guides us through Kaspi’s growth into the country’s premier digital financial services company. Uncover the distinct challenges and prospects of operating and investing in Kazakhstan, a geopolitically intriguing emerging market, and learn how Kaspi is revolutionizing the financial sector, boosting consumer interaction as it cleverly layers its platform, and hoping to accelerate the future of digital finance. Episode Transcript Available Here. (02:18) What is a fintech, really? And the story of Kaspi’s super app transformation (04:26) An overview of the three main business lines and a strong business model (09:00) “Now let’s plop it [the business model] into Kazakhstan.” (18:03) Synergies across the network and Brian’s favorite insight into Kaspi (20:08) Mechanics of the business: An initial public offering (twice) and the Baring Vostok connection (25:38) Brian breaks down Kaspi’s relationship with Kazakhstan and Kazakhstan’s relationship with the elephant in the room. (32:23) Investing in businesses domiciled in Kazakhstan comes with some additional research. (35:48) Growth opportunities for Kaspi and the potential to reach maximum penetration (40:27) Careful not to understate the potential value of layering new services on an existing platform Related content from Sands Capital Sign up to receive our monthly Perspectives newsletter: Our latest thinking on innovation investing, long-term capital, and culture In case you missed it: What Matters Most Episode 8: Inside Cadence: The Software Powering Semiconductor Breakthroughs. Catch our most popular episodes from this season: Globant Takes A Design-First Approach to Pure Play Digital Service ⁠Revolutionizing Public Safety: The Axon Ecosystem⁠ Follow What Matters Most wherever you listen to podcasts and never miss an episode. Learn more about Sands Capital, sign up for our newsletter, and follow us on LinkedIn. Review our podcast season and episode disclosures here.

In this episode of What Matters Most, Sands Capital Sr. Research Analyst Daniel Pilling takes us on a deep dive into the world of Cadence, the leading software provider in the semiconductor industry. From the evolution of semiconductor design to the potential of generative AI, we explore the intricate processes and challenges in chip design. We delve into the cyclical nature of the semiconductor industry, the value addition in both leading edge and analog chips, and the strategic role Cadence plays in this dynamic ecosystem. With their software integrated into the manufacturing process of semiconductors, Cadence has the potential to shape the future of the industry. Episode Transcript ⁠Available Here⁠. Show Notes: (00:53) Cadence’s two offerings (03:00) Overview of the semiconductor manufacturing process (if you didn’t listen to the Entegris episode) and the three-legged stool analogy (05:34) Electronic design automation (EDA) tools and evolution of semiconductor design process (09:52) Physical limitations, shrinking transistors, and the laws of physics (13:04) Error reduction, adapting to increasing complexity, and generative AI (17:17) Daniel’s five- to 10-year view on whether AI is a future alternative to EDA (19:00) Who actually uses Cadence software? (21:49) A counter to the cyclical nature of the semiconductor industry (23:31) The value added in analog chips, and legacy Cadence software (25:58) Frequency of chip re-architecting (28:22) Management team and a second act (30:55) Risks and how Cadence can benefit from the Jevons Paradox (34:25) Daniel’s not worried about “the wall of worry.” (36:05) The end of Moore’s Law and the paradigm shift to quantum chips (40:36) How did Daniel become an investor? (44:44) Daniel’s closing hypothesis and conviction in investments Related content from Sands Capital Business Breakdowns Podcast: Daniel Pilling - Entegris: Solutions for Semiconductors ⁠Sign up to receive our monthly Perspectives newsletter: ⁠Our latest thinking on innovation investing, long-term capital, and culture In case you missed it: What Matters Most Episode 7: Globant Takes A Design-First Approach to Pure Play Digital Service Catch our most popular episodes from this season: Kaspi: The Super App Reshaping Kazakhstan’s Financial Landscape ⁠⁠Revolutionizing Public Safety: The Axon Ecosystem⁠⁠ Follow What Matters Most⁠ wherever you listen to podcasts and never miss an episode. Learn more about ⁠Sands Capital⁠, sign up for ⁠our newsletter⁠, and ⁠follow us on LinkedIn⁠. Review our podcast season and episode disclosures ⁠here⁠.