Sands Capital - What Matters Most

By Sands Capital

Go inside the businesses driving global innovation, changing the way we live and work. Sands Capital is an active, long-term investor, and each podcast in our What Matters Most series offers investors an in-depth look at a particular company, explains how our high-conviction strategy led us to target them, and why we expect them to be a leader going forward.

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Sands Capital - What Matters MostOct 27, 2021

00:00

29:24

Kaspi: The Super App Reshaping Kazakhstan’s Financial Landscape

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. 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.

Show Notes:

(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:

Banking on Emerging Markets (article)
Digital Transformation Spurs Financial Inclusion in Kazakhstan (article)

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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:

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. Additional disclosures can be reviewed at www.sandscap.com/disclosures.

Mar 29, 202444:45

Inside Cadence: The Software Powering Semiconductor Breakthroughs

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

Globant Takes A Design-First Approach to Pure Play Digital Service

If you’ve never thought about investing in IT services, this podcast episode could change your mind. 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

Show Notes

(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 episodes

⁠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 6

Revolutionizing Public Safety: The Axon Ecosystem

Catch our most popular episodes from this season:

⁠⁠⁠The Hidden Player in the Semiconductor Boom⁠⁠⁠

Reliance Industries: Fueling India's Emerging Consumer

Dexcom’s Innovation in Diabetes Care: A Growth Story Unfolding ⁠

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. Additional disclosures can be reviewed at www.sandscap.com/disclosures.

Jan 31, 202454:06

Revolutionizing Public Safety: The Axon Ecosystem

Its mission is simple: protect life, preserve truth, and accelerate justice. As Axon Enterprises innovates to try to achieve that goal, its solutions are rapidly becoming the industry standard. In this episode of What Matters Most, Sands Capital Portfolio Manager and Sr. Research Analyst Danielle Menichella, CFA discusses the business’ journey from Taser maker to artificial intelligence-powered software developer. We’re diving deep into how its wide range of technologies work in tandem, what the future of public safety might look like—and why we believe all of this makes the business an attractive investment opportunity.

Show Notes

(2:22) Axon’s product line, from Tasers to body cameras

(6:50) The ethical considerations of investing in a manufacturer of weapons and surveillance equipment

(13:55) Eyeing untapped markets and finding opportunities in growing markets overseas

(19:55) Using artificial intelligence for faster redactions, transcriptions, and archiving of bodycam footage

(21:07) Navigating privacy concerns around surveillance devices and data storage

(27:15) Preserving human accountability as public safety technology advances

(35:50) The big question for Danielle: To be or not to be tased? Disclosures: www.sandscap.com/WWW-Disclosure

Dec 29, 202344:07

Charging Ahead: Visa Shows No Signs of Slowing

This episode of What Matters Most dives into the evolutionary journey of Visa, a titan in the payments industry. Discover how the company continues to thrive by enabling innovation. Join Sands Capital Portfolio Managers Sunil Thakor and Michael Raab as they unpack the company's history, technology, and the formidable network that cements its position as an industry leader. From IPO to the present, we dissect the anatomy of Visa's enduring success.

https://www.sandscapital.com/WMM-Disclosure

Nov 30, 202337:30

Reliance Industries: Fueling India's Emerging Consumer

Reliance Industries’ portfolio of products and services touches almost every person in India on a daily basis—and fueled by favorable micro and macro trends, the company shows no signs of slowing down. In this episode, Sands Capital senior analyst Matt Luneburg, CFA explains why Sands Capital has a strong conviction in Reliance.

https://www.sandscapital.com/WMM-Disclosure

Oct 31, 202356:05

High Octane Investing: Inside the Formula One Phenomenon

When Liberty Media bought the commercial rights to Formula One in 2017, it set a plan into motion: to transform this auto racing sport into a truly global phenomenon, backed by a strong brand and high-profile commercial partners. Sands Capital technology analyst Ben Betcher, CFA explains in this episode of What Matters Most, how Formula One’s tech-like business model differentiates it from other professional sports, and why it continues to drive interest from many investors.

Show Notes

(1:16) The business transformation of Formula One

(5:44) Understanding brand partners’ roles: From Mercedes to Amazon Web Services

(8:30) How the linear vs. streaming sea change impacts growth opportunity

(11:44) The Formula One platform: a tech-like business model

(13:30) Soaring team valuations

(15:54) The checkered history of Formula One

(17:39) An asset-light business approach

(18:07) Formula One’s competitive advantage

(20:38) The strength of a young and diverse audience

(21:25) Risks: rival leagues? sustainability?

(23:59) Improving monetization: The gamble of Las Vegas

(26:17) Growth drivers of promotion, sponsorship, advertising

(33:30) How Sands Capital analyzed and vetted Formula One as an investment opportunity

Disclosures: https://www.sandscapital.com/WMM-Disclosure

Sep 29, 202337:14

Dexcom’s Innovation in Diabetes Care: A Growth Story Unfolding

In a world where more than 500 million people battle known and undiagnosed diabetes, Dexcom stands out. This trailblazer in continuous glucose monitoring is on track for substantial growth amid evolving diabetes detection and treatment. In this episode, Senior Research Analyst Jenny Goldsmith, CFA details how Dexcom’s state-of-the-art software and predictive algorithms are revolutionizing diabetes care and why Goldsmith believes Dexcom’s distinctive edge translates into investment opportunities.

www.sandscapital.com/WMM-Disclosure

Aug 29, 202338:01

The Hidden Player in the Semiconductor Boom

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 technology 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.

https://www.sandscapital.com/WMM-Disclosure

Jul 28, 202345:09

Keyence – An Automation Leader Poised for Growth

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.

https://www.sandscapital.com/WMM-Disclosure

Jun 22, 202228:52

Rentokil Initial – Finding Compelling Opportunities in Unusual Places

Growth investing often focuses on innovation, but Sands Capital’s Michael Raab and Matthew Luneburg show Rentokil as an example of a growth business that favors refining what’s already working. Rentokil, a pest control industry leader, has consolidated its technician service routes to achieve efficiencies and a significant competitive advantage. Listen as Michael and Matt talk about how we built conviction in what may seem an unlikely investment for Sands Capital.

https://www.sandscapital.com/WMM-Disclosure

May 16, 202234:04