Fledgling boutique investment bank Artis Partners plans to capitalize on an artificial intelligence investment boom and provide advisory services for technology M&A in the US and Europe.
Despite recent volatility in US tech stocks, investor funds continue to pour into AI companies, according to Artis Partners managing partner Victor Basta. Artis Partners plans to advise on those companies' fundraising rounds, though the bulk of its business will come from advising on technology M&A. Firms working with AI have proven to make attractive acquisition targets, Basta said in an interview.
Before there was Artis Partners, London-based investment bank Magister Advisors Ltd. sold to a larger firm, DAI, in 2020. After four years at DAI Magister Ltd., Artis Partners was spun out in December 2024.
"It just so happens that we spun it out right at the time when the technology M&A intensity has ... multiplied since September, October," Basta said.
Now an independent firm, Artis Partners has between 10 and 20 employees and is continuing to add to its team, Basta said. Management wants 15-to-20 employees who can do the work of 50 employees through the implementation of AI. Basta believes that investment bank advisory businesses can operate at a fraction of the size they are now by using the technology.
Artis Partners has an equal split of US and European clients, with a narrow focus on advising AI companies or technology companies that use AI. The firm's target advisees are AI companies in series C and D funding rounds that are raising significant sums of money. Those companies are no longer considered startups, but are still growing 50% to 100% every year, Basta said.
AI boom
Artis Partners plans to devote roughly 30% of its business to advising AI companies on fundraising and advising investors' funds.
Investors are heavily targeting AI companies to deploy capital. Half of the venture funding rounds in 2024 went to AI companies, Brenon Daly, a research analyst at S&P Global Market Intelligence 451 Research, said in an interview.
AI is still in the early stages of its life cycle, and most AI companies are still focused on organic growth or getting capital from investors to keep growing, Daly said.
Hype has so far insulated the AI market from larger market trends, which has seen growth slow in the tech sector, Daly said. The launch of DeepSeek, a Chinese open-source AI model, caused some US tech stocks to plunge on Jan. 27, but DeepSeek is unlikely to influence buyer behavior when it comes to AI, Daly said.
Non-native AI
Companies in every sector are toying with generative AI's capabilities, and those "non-native AI" companies are mostly still in the testing phases of adding AI to internal operations, Daly said.
"Right now, what we're seeing is companies kind of kicking the tires on AI," Daly said. "In some cases, there is some benefit. In other cases, kind of a wash."
Non-native AI companies are where M&A will be fruitful, Basta said. Companies with AI integration may reach profitability faster as a result of the technology's ability to streamline processes, making them attractive acquisition candidates, he said.
The firm recently advised on the London-based proposed sale of the fintech company Freetrade Ltd. to IG Group Holdings PLC, announced Jan. 16. The fintech industry has used AI to achieve a speedy maturation process, Basta added.
