Asset Manager Investing in Global Technology Sector

We're an asset management firm allocating our capital into asset classes benefiting from technological innovation and applications globally. We serve as a family office of a tech professional who has spent over a decade as an entrepreneur, operator, and venture investor across Asia and the US.

Our small team is made up of diverse investment professionals who research, identify, and execute relevant opportunities. We occasionally share some of our investment memos, insights, and analysis here.

Wednesday, May 13, 2020

Q2.2020 - ServiceNow: Mission Critical At Scale

Founded in 2004, ServiceNow (NOW) is an interesting large-cap opportunity that stands out in the enterprise software space. Its digital workflow platform has become a mission-critical tool across many enterprise organizations. As of Q1 2020, 80% of the Fortune 500 are ServiceNow’s customers. In the near-term, we have not seen any signs of a slowdown as sales remain solid despite the COVID-19 situation. In Q1, the business posted a +30% growth with the number of deals with $1 million of ACV or higher increased by 48% YoY.

ServiceNow's strong product-market fit is its key success factor in the enterprise market. Its workflow tool proves to be mission-critical outside enterprise ITSM. The number of clients with ACV larger than $1 million has doubled over the last 3 years. As of Q1, it has 933 enterprise clients with over $1 million ACV. We see growth opportunities in both enterprise HR and CSM going forward. ITSM share of new ACV dropped by 200 bps while HR/CSM grew by 300 bps. We also expect ServiceNow to land its 1,000th enterprise client in the next two quarters.

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