We produce a lot of research here at Lux. Sometimes even we have trouble keeping track of the most impactful and urgent items to bubble to the top. So, we’ve taken the time to sort through the recent companies, technologies, and trends we’ve analyzed to find the things we’re seeing that you need to know about. The full analyses are available to Lux clients only, but we wanted to share some highlights here. As always, we are here for you if you have deeper questions.
- A Bite-Sized Tutorial for Machine Learning
Whether you work in food, pharma, energy, materials, or virtually any other industry, becoming conversant in AI and machine learning is critical. To help our clients get dangerous fast, we constructed a simple analysis to let beginners at least get the basics of what to look for when considering machine learning solutions. Even if it’s a simple as knowing the difference between supervised, unsupervised, and reinforcement learning, or being ready to provide an executive summary to a leader in your organization, it’s time to get started.
- A Realistic Look at Electric Aviation
Flying cars are all the rage, and while there’s a lot of hype we do see promising innovation in electric aviation. We segment the space into 1) air taxis and flying cars 2) small regional aircraft and 3) commercial airliners. From our perspective bucket 2 (regional aircraft) is the most attractive, since infrastructure and regulation create a favorable market and the clearest path to positive payback from fuel savings. Here we like Ampaire, which has designed a scalable electric powertrain with swappable Li-ion batteries and is making rapid strides.
In bucket 1, there are lots of overhyped players like Geely subsidiary Terrafugia, which recently announced sales of its Transition “roadable plane” – but we don’t see much of a market for a vehicle that requires operators to have a pilot’s license and access to an airstrip. In contrast, we like Kitty Hawk, which is developing the Flyer, a single-person aircraft, as well as Cora, an autonomous two-person air taxi. Unlike many of the overhyped players in the space, they are quietly moving from concept to product quickly, appear to have a scalable design, and have made positive strides towards an autonomous system. As for bucket 3, we’re not holding our breath. Hybrid architectures are much more likely and will still take years; full electrification will hinge on whether technologies like Li-S and solid-state batteries make significant strides.
- A Head-to-Head Look at Three 3D-Printing Unicorns
Desktop Metal, Carbon, and most recently Formlabs are all valued over $1 billion, and looking at the most valuable companies provides a snapshot of where the market is going. Each has a unique approach as summarized in the table below. Desktop Metal is of course a metal printer, and while Carbon and Formlabs both offer polymer 3DP printing based on vat polymerization, the two have different value propositions. Carbon is focused on speed – it can print parts in 30 min that would take a Formlabs printer hours – while Formlabs can print complex parts with minimal post-processing compared to Carbon. Of the three we are most bullish on Formlabs – it’s profitable already and offers higher value per dollar spent when considering capital cost, part quality, and post processing requirements.
- An M&A Frenzy Hits the Predictive Maintenance Space
Since this spring, six prominent predictive maintenance companies have been acquired, including all the companies we placed in the “Dominant” quadrant of the Lux Innovation Grid for this space (see below). The acquirers are all over the map – a telecom/IT player, a semiconductor company, and even an insurance company – showing that the use of sensing, analytics and machine learning to maintain uptime can lead to value in a multitude of ways for both technology developers and end-users. For those still looking to add predictive maintenance capabilities, their remain some attractive players such as Senseye, Prophecy Sensorlytics, Augury, 3DSignals, and Mnubo – but act fast.
- A Recipe For Success in Prebiotics
Understanding the impact of the microbiome on health outcomes is a huge trend in the health and wellness space, and prebiotics – ingredients that stimulate a healthy microbiome but, unlike probiotics, aren’t microbes themselves – are a key tool. Our analysts are following three key trends in this space.
First, firms putting prebiotics into packaged foods and beverages, need to formulate products that are effective at low doses. We like Greenteaspoon and Prenexus Health as having solutions that are effective at significantly lower doses than incumbents. Second, prebiotics with inherent sweetness will be a winner as food and beverage firms look to reduce sugar. Some prebiotics, like BioNeutra’s VitaFiber can reduce sucrose content while minimizing the loss in bulk other sugar substitutes suffer from, and provide a microbiome benefit to boot. Finally, we expect big things from human milk oligosaccharides (HMOs), ingredients naturally present in breast milk that stimulate positive microbes in the gut of infants. Innovation here from firms like Jennewein Biotechnologie and Inbiose could change the infant formula game.
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