The AI Frontier:

Why will the Traditional Investment Banker Survive?

The rise of Artificial Intelligence (AI) in 2023 has caused a wave of disruption in various industries…

Rise of AI

28% Record growth of global patent filings in AI for Q1 2022*1

1.7B Generated across 46+ VC deals in AI for Q1 2023*2

Impact of AI on different industries

40% Infrastructure & operations teams will start using AI by 2023*3

3.8T Forecasted gain of manufacturing sector from AI by 2035*4

1 in 4 Sales teams currently use AI in day-to-day work*5

* 1 According to a Globaldata * 3 According to Gartner * 5 According to Accenture

2 / Private and Confidential * 2 According to Pitchbook * 4 According to Accenture
…Also impacting Investment Banking(IB) which has an average deal cycle of 6-8 months
• Follow-up meetings • Finalize
• Determine objective
& calls with investors documentation
• Prepare marketing
• Due diligence • Sign agreement &
materials
• Receive final bids close transaction
• Financial Modelling

Solicitation Meetings, Due Evaluation &

Market Research Preparation Finalization
& Marketing Diligence & Bids Negotiation

• Study recent • Contact investors

transactions • Distribute materials • Evaluate proposals
• Analyse trends to • Prepare data room • Negotiate terms
speed deal-sourcing • Solicit initial bids • Select final candidate

M&A deals take 31% longer now than they did in 2010*

How can Artificial Intelligence disrupt and evolve the Investment Banking industry?

* According to a Gartner study

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With M&A facing greater complexity ahead, there are multiple deal cycle stages which can be automated

Effort-Automation Matrix for IB

Solicitation & Marketing Financial Modelling Market Research Valuation Due Diligence
High
Chance of automation

• Finalization • Evaluation
Low

• Meetings • Negotiation

Low High
Time & effort

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1. AI can streamline research & allow dealmakers to identify more opportunities

1. M arket Research & Deal Sourcing 2. Valuation 3. M arketing 4. Financial M odelling 5. Due Diligence

Tool Capabilities Use cases

Sealk is a powerful AI-driven platform that aids firms in • Eliminating manual effort in research
deeper efficient market research by providing intelligent • More comprehensive & relevant research
results tailored on search criteria

Cyndx Finder utilizes AI and NLP to determine the most • Avoid unstructured private company data
suitable private companies for specified transactions avoiding • Better deal sourcing via flagging
the manual research effort companies which may need funding

Valu8 uses AI-powered similarity scoring to help users analyse • Well-researched competitor analysis
private companies in the M&A market. It helps users to • Traneko Mergers & Acquisitions chose
uncover new target companies through the European market Valu8 as private company data provider
for increasing geographical reach.

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2. AI can transform valuation by generating faster valuations & real-time benchmarking

1. M arket Research & Deal Sourcing 2. Valuation 3. M arketing 4. Financial M odelling 5. Due Diligence

Tool Capabilities Use cases

Enloop provides a real-time score comparing the company’s • Suited for valuation of start-ups & SMBs
financial ratios to industry averages for performance analysis • Provides real-time relative valuation

• Boutique advisory firms such as Bacchus

Futrli’s Daily Tracker provides historic and future estimated Advisory have saved upto 3 days per
cash flow, P&L, giving users a clear overview of the business financial forecast by using Futrli

The platform's Hyperblock calculation engine ensures ultra-fast • Creating robust and agile forecasts
calculations allowing for real-time insights and projections • A Forrester TEI report has cited a
whopping 303% ROI on using Anaplan

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3. AI can automate creation of materials & provide marketing campaign insights

1. M arket Research & Deal Sourcing 2. Valuation 3. M arketing 4. Financial M odelling 5. Due Diligence

Tool Capabilities Use cases

Leveraging AI, Tome AI simplifies the process of generating • Multilingual materials for global markets
compelling marketing content in a fraction of the time • Faster creation using predefined templates
Tome. AI

• VC funds such as The Faktory used

PitchBook can easily identify suitable individuals to connect
Pitchbook to reduce time for outreach
with at organizations, ensuring efficient and targeted outreach
research and better their investments.

eCold.ai can generate lines 40x faster & retrieves information • Automatically creates hyper-personalized
from LinkedIn, ensuring high-quality personalization cold emails for investor reach out.

• IEG Investment Banking Group, uses it

Affinity is a relationship intelligence platform which helps
to measure interactions & effectiveness
bankers to identify, qualify & connect with potential investors.
of outreach campaigns.

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4. AI can automate inputs & generate sophisticated financial models faster

1. M arket Research & Deal Sourcing 2. Valuation 3. M arketing 4. Financial M odelling 5. Due Diligence

Tool Capabilities Use cases

• Eliminates manual mapping

Clockwork is a financial modelling platform offering real-time • General Cents use it to identify trends
FP&A software and advisory services to their clients
which manual Excel modelling cannot

With Modano, users can create integrated 3-way financial • 3-way modelling without manual overload
models that are automatically linked to accounting packages • Enable real-time insights

• Accounting firm Naked Accounting uses

The platform automates financial modelling, allowing users to it for agile start-ups as it allows creation
create forecasts, scenarios, and projections easily of new charts & projections quickly

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5. AI can automate data gathering, analyse documents and extract contract information quicker

1. M arket Research & Deal Sourcing 2. Valuation 3. M arketing 4. Financial M odelling 5. Due Diligence

Tool Capabilities Use cases

• Generates risk reports to spot red flags

SignalX offers comprehensive due diligence capabilities for • JDP & Co, LexLegal use it to automate
investment banking firms during the M&A process due diligence & fast-track deals

Imprima includes various tools like AI-powered VDR Index • The UniCredit Group used Imprima to
which categorizes and structures data room documents, saving establish a VDR for 400+ users to safely
time and eliminating human error access 120,000+ pages of information

• Saves up to 90% of the time for Plante

Kira Systems uses machine learning for due diligence in
Moran, BKD by automated extraction of
investment banking, enabling accurate and efficient reviews
provisions through analysis of contracts

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Integration of AI will give the IB value chain a 360 transformation enabling bankers to focus on more complex deals.

Impact of AI on IB stages Conclusion

Market Research Manual scavenging for research AI is crucial but cant replace humans in IB
materials will be automated
AI tools can automate tasks & offer insights
Materials require review before
Marketing
external access AI allows prioritization of important tasks

IB industry needs to adopt AI technology to be

Valuation is subjective i.e., competitive and gain advantages
Valuation
requires the human eye
Adaption to changes in AI will enable banks to
stay ahead of the curve
Complex calculations become
Financial Modelling
fast and automated
For e.g., a top 50 UK firm uses Luminance AI for
legal doc review & analysis; causing an 85%
Due diligence needs human decrease in project review cost*
Due Diligence
discussions with clients

Degree of Impact

*According to AdminControl
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 Contact Us
Rakesh Gupta
Managing Partner, LoEstro Advisors

Email: rakesh.gupta@loestro.com

Phone No:
+91-9948426111
+91-6301790754

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