In the latest episode of the Heavy Hitters Podcast, host Ty Finley sits down with Dan Renouard and Rodd Langenhagen from Baird, a global financial services firm managing over $490 billion in clients’ assets. Renouard, Managing Director of Strategic Initiatives, and Langenhagen, Managing Director in Baird’s Global Technology and Services Group, bring their extensive expertise to the table to discuss the current state of capital markets and the unique growth of industrial software.
Renouard, a generalist focusing on making connections across the firm, shares his perspective on the cautious optimism in the market, with software, services, and aerospace/defense sectors remaining strong, while consumer and biotech face challenges. Langenhagen, who covers software with a focus on industrial and AEC applications, dives into the factors that have propelled industrial software from relative obscurity to one of the hottest sectors in the industry.
“Today, the tables have turned, and as you mentioned, it’s sort of one of the hottest sectors in software. If you look at 2022, 2023, there was a widely regarded slump in tech and tech M&A, but this space was really where the excitement was in terms of deal multiples, deal volume and capital deployed. So this space held up quite well.”
The conversation delves into the sector factors driving the growth of industrial software, including the massive white space opportunity, the law of large numbers driving ROI, mission criticality, knowledge transfer, and digital transformation. Langenhagen also highlights the investor dynamics at play, such as diverse exit options, SaaS conversion, and land and expand strategies, which have made industrial software an attractive space for investment.
Looking ahead to the second half of 2025, the Baird executives discuss the momentum in IPO readiness and equity capital markets for quality assets. They also share insights into the construction tech sector, which is seeing a wide range of opportunities and active deal-making.
When it comes to AI in industrials, Renouard and Langenhagen emphasize the importance of separating signal from noise. Successful companies leverage AI to solve real-world problems for customers, with deep domain knowledge and unique, rich, proprietary data sets serving as competitive advantages.
It’s all about the solution for the customer. How are you helping me and what I’m trying to accomplish? So I do think the most successful private companies, are uber customer focused and uber focused on, the marketing around AI is like, look, I don’t know that I necessarily care, other than it’s assumed now that you’re utilizing AI. How are you helping me solve my problems and make it easy for me to leverage your solution to solve what matters to me?
The podcast concludes with a quick hitter wrap-up, highlighting GenLogs as an under-the-radar company to watch, applying counterterrorism technology to supply chain visibility. Recommended resources for those interested in the industrial innovation ecosystem include Built Worlds, Freight Waves, and the Manufacturing Leadership Council. Finley also suggests Florence Rezalin at Dassault Systèmes as a potential guest for future episodes.
To learn more about Baird’s services and expertise in the intersection of industrial innovation and capital markets, reach out to Dan Renouard at drenouard@rwbaird.com and Rodd Langenhagen at rcl@rwbaird.com.
