Deals, Deals, Deals: Hexagon & Ansys acquire tuck-ins, even as VCs slow their roll

PLMish companies continue to add incrementally to their offerings, though none has made a big, game-changing acquisition in a while.

Today, Ansys said that it was adding thermal and fluid analysis for space applications and satellites via the acquisition of C&R Technologies. C&R, aka Cullimore and Ring Technologies, makes Thermal Desktop, which Ansys says is a “thermal-centric modeling approach [that] provides fast and effective system-level simulation capabilities … and can be used in combination with Ansys’ physics solvers to provide customers with the fidelity required at every stage of thermal system design and optimization.” No terms were announced, but Ansys does say that the acquisition is not expected to have a material impact on Ansys’ consolidated financial statements in 2022.

And before we leave the topic of Ansys: The company seems to have a new tagline, one that I really like: “Take a leap of certainty … with Ansys.” Leap = bounding forward, perhaps into the unknown — but Ansys can help with that, providing certainty. It’s all marketing, but words matter. These are good words.

But that’s not the only deal of note. Hexagon last week announced that it will acquire AVVIR, makers of a “BIM-focused reality analysis platform [that] improves project workflows, schedules, and outcomes by leveraging onsite reality capture data, enriched BIM models and AI … [to give]construction teams control with automated schedule tracking, cost and earned value analysis, installation issue detection, and an updated BIM with as-built conditions.” Hexagon plans to integrate AVVIR’s solutions with its BricsCAD and HxGN Smart Build portfolios. Also no transaction details made public, but I can’t imagine that this is a large enough transaction to affect Hexagon’s overall results.

Finally, according to Crunchbase, venture funding for the third quarter of 2022 totaled $81 billion, down $90 billion (that’s down a staggering 53%) from a year ago and down $40 billion sequentially: They believe that “funding … will increase a little in the coming months as stealth fundings are announced.” I’m not sure what that means–you don’t announce stealthy things–but any optimism is good.

That $81 billion total is big in absolute terms, but it mixes many different investment possibilities, industries, and geographies into one big bucket. I don’t have access to industry data, so no sense of investment in PLMish technologies, for example, but Crunchbase does break the overall total down by stage. They say that early-stage funding was $34 billion in the third quarter of 2022, down 39% year over year. “Series A funding [was] the least impacted … down 23% year over year. Series B funding dropped 54% for the same time frame.” (Check out their article for more slices of the pie.)

Typically, a company starts with money from founders, friends, and family, known as seed capital. Series A financing usually comes from outside sources once the company has shown that it has a viable product, knows how to get it to market, and can generate a return for investors. Series B financing is a (surprise) second round of funding, and Series C rounds happen when investors put capital into a successful business to scale the company, perhaps by funding acquisitions.

Yes, VC funding is down across these categories but it’s down the least at Series A, where cash can do the most good. Early-stage companies are still trying out new ideas, product concepts, sales strategies, partnerships — all the things that move entire industries forward. That investment is down the least in that stage is very hopeful. Flat or up would be better, of course, but we’ll take what we can get.