As we close Q3 2024, deep tech breakthroughs drive a profound shift across various industries. AI, automation, and digital twins have evolved from emerging technologies to essential manufacturing, energy, and supply chain tools. The Rockwell Automation State of Smart Manufacturing report reveals that 83% of manufacturers expect to integrate generative AI in 2024, and 95% either use or evaluate smart manufacturing technologies. These advancements reshape everything from process optimization and quality control to operational efficiency.
Stock Market Volatility and Venture Capital Exits
September’s market volatility has impacted venture capital exits, leading to delays in IPOs and acquisitions. While early 2024 showed signs of recovery, exit values remain below historic highs. However, AI-driven sectors continue to present strong opportunities for growth in the coming months.
M&A Trends in Q3 2024
In Q3 2024, M&A activity in the industrial sector remained cautious, with companies focusing on strategic investments in AI, automation, and supply chain technologies. While deal volumes have been lower, investments in electric vehicles, cloud computing, and robotics are gaining traction as firms seek to build resilience and innovate. Key sectors like automotive and aerospace & defense have been active, driven by the push for digital transformation and supply chain agility(source: KPMG)(PwC).
AI & Automation: Leading the Next Frontier in Manufacturing
According to the Rockwell Automation report, 83% of manufacturers will integrate generative AI by 2024, signaling a revolutionary shift in quality control, efficiency, and resilience. Moreover, 95% of manufacturers are adopting smart manufacturing technologies, highlighting the pivotal roles of automation and real-time data analytics in future industrial processes. Despite economic uncertainty, labor shortages, and cybersecurity concerns, over 1,500 manufacturers contributed to this report, indicating optimism for the impact of advanced technologies in driving growth. Read the entire "State of the Smart Manufacturing Report 2024" by Rockwell Automation.
Source: State of Smart Manufacturing Report by Rockwell Automation
Meanwhile, Nvidia continues to lead AI innovation, from predictive analytics to digital twins and AI-powered automation. Despite regulatory scrutiny, Nvidia remains a critical player in driving efficiency across manufacturing and energy sectors, emphasizing the role of deep tech in enabling sustainable growth (source: productsup.com) (source: markets.businessinsider.com).
Industry Trends Shaping the Future
Cybersecurity Threats in the Supply Chain: As industries rely more on interconnected systems, cybersecurity has emerged as a critical concern. By 2025, 45% of global organizations will face cyberattacks targeting their supply chains (source: DirectIndustry e-Magazine). Xage Security, a leader in industrial cybersecurity and one of Momenta's portfolio companies, offers a zero-trust security platform designed to protect critical infrastructure from evolving threats. Their solutions are instrumental in helping businesses secure operational technology (OT) environments as they adopt advanced digital tools.
Reshoring and Supply Chain Resilience: Manufacturers are increasingly prioritizing reshoring strategies to address geopolitical, material, and climate-related risks. AI-driven predictive tools and digital twins are empowering industries to enhance transparency and manage these uncertainties more effectively (source: IMTS). Atym.io, one of Momenta’s portfolio companies, is transforming the supply chain by enabling edge orchestration on resource-constrained devices. Their technology allows businesses to scale and secure IoT environments more efficiently, ensuring that industries can adapt to challenges with greater agility and security.
Battery Supply Chain Expansion: North America is experiencing rapid growth in lithium-ion battery production, a key enabler for electric vehicles (EVs) and renewable energy storage. This expansion is vital for developing resilient, localized supply chains to support the clean energy transition (source: NREL).
Looking Ahead: What's Next for Q4?
As we move into Q4, AI, cybersecurity, and supply chain resilience will remain at the forefront. Businesses that accelerate AI integration and adopt robust, resilient supply chain strategies will be better positioned to lead in this rapidly evolving landscape. Companies like Xage Security and Atym.io, both part of the Momenta portfolio, are driving innovation in these critical areas, providing the tools and solutions necessary for businesses to stay competitive and secure in the digital age. At Momenta, we stay at the forefront of these trends, equipping our partners with the strategic insights, investments, and partnerships needed to harness deep tech for lasting competitive advantage. Let us help you drive long-term success by leveraging the most innovative technologies shaping the future and impact of the industrial sector.
For readers looking to dive deeper into the trends discussed, here are some valuable resources and articles that offer further insights into how AI, supply chain resilience, and battery manufacturing are transforming industries.
Momenta is the leading Industrial Impact® venture capital firm, accelerating industrial innovators across energy, manufacturing, smart spaces, and the supply chain. For over a decade, our team of deep industry operators has helped scale industry leaders and innovators to improve critical industries, the environment, and people's quality of life. PitchBook has ranked Momenta as one of the ten best-performing venture capital firms for 2023 in its prestigious Global Manager Performance Score League Tables, and the firm is the only European-headquartered VC to secure a Top 10 spot on the list. For more information, please visit http://www.momenta.one.
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