Investment Pitches

Pitch Summary:
Circle is a financial technology platform centered on stablecoins and blockchain-based payments infrastructure, most notably as the issuer of USDC, a dollar-backed digital currency. Today, the company generates revenue primarily from interest earned on reserve assets, such as short-term Treasuries, backing its stablecoins, while expanding into developer infrastructure, payments networks, and tokenized financial products. While recent results already highlight rapid growth in USDC circulation and transaction volumes, we believe we're at an inflection point where adoption could accelerate over the next few years.

BSD Analysis:
Jacob Funds presents a bullish thesis on Circle Internet Group, positioning it as a key beneficiary of the growing stablecoin and blockchain payments ecosystem. The manager highlights Circle's dominant position as the issuer of USDC, which generates revenue through interest on reserve assets backing the stablecoin. The fund sees Circle at an inflection point where adoption could accelerate significantly over the coming years. The company's expansion into developer infrastructure, payments networks, and tokenized financial products provides multiple revenue streams beyond its core stablecoin business. With rapid growth already evident in USDC circulation and transaction volumes, Circle appears well-positioned to capitalize on the broader adoption of digital currencies and blockchain-based financial infrastructure. The timing of this investment coincides with increasing institutional and retail acceptance of stablecoins as a bridge between traditional finance and digital assets. Jacob Funds' conviction in Circle reflects their belief in the long-term structural shift toward blockchain-based financial services.

Pitch Summary:
Salesforce, Inc. is a leading customer relationship management (CRM) software company that helps businesses keep track of every interaction they have with their customers, from initial sales to ongoing support. Beyond its core CRM, Salesforce's ecosystem includes Slack, one of the most well-known and widely used tools for helping employees at large companies communicate internally. Opportunities to buy founder-led market leaders at a discount are rare. But recent worries that AI might allow companies to build their own "DIY" software provided an entry into what we view to be a great business trading at its lowest valuation since coming public in 2004. We view this threat as overblown, because it is both difficult and highly risky for a large company to trust its most valuable data and mission-critical operations with homemade code. Instead, Salesforce is leveraging AI through its new Agentforce tool, which deploys autonomous agents to handle complex customer and sales workflows, and is already seeing impressive growth. CEO and co-founder Marc Benioff argues that AI opens up more addressable markets for Salesforce as it moves beyond record keeping alone to actual customer service and sales tasks with agents. By stepping in during this period of high volatility, we have established a position in a best-in-class market leader at a discounted price.

BSD Analysis:
Penn Davis McFarland initiated a new position in Salesforce during a period of AI-driven market volatility, capitalizing on fears that artificial intelligence could disrupt traditional software companies. The fund views the AI threat as overblown, arguing that enterprises are unlikely to replace mission-critical CRM systems with homegrown AI solutions due to data security and operational risks. Instead, they see Salesforce as well-positioned to benefit from AI integration through its Agentforce platform, which uses autonomous agents for customer service and sales workflows. The investment thesis centers on acquiring a founder-led market leader at its lowest valuation since its 2004 IPO, with the fund believing Salesforce can expand its addressable market by moving beyond traditional record-keeping to active customer engagement through AI agents. The timing appears opportunistic, as the fund established the position during peak market fears about AI obsolescence in the software sector.

Pitch Summary:
Colefax is a tiny, illiquid, founder-led luxury home-furnishings group with a 90-year heritage and one of the strongest design brands in high-end interiors. The company has retired 81% of its shares since 1999 and sits on £3.77/share in cash, giving it an EV/EBIT of only ~3.1x. Its Product division (fabrics + wallpaper) is the real economic engine, with 8–12% EBIT margins, near-100% FCF conversion, outsourced production, and premium pricing power in the US, which now represents over half of sales. Near-term, US tariffs (+10–50%) are a headwind, but Colefax can mitigate them by shifting production out of India, lifting prices, and leaning into its highest-margin US brands (Cowtan & Tout). Buybacks are likely to continue, especially after low tender uptake, and a dividend shift could attract UK yield investors.

BSD Analysis:
Colefax represents a structurally underappreciated luxury design asset trading at deep-value industrial multiples despite brand equity that would command a premium valuation in any strategic process. The company’s long operating history, exceptionally disciplined founder-led stewardship, and ultra-lean, outsourced production model give it a level of earnings durability rarely seen in micro-caps. Its U.S. business—the highest-margin geography and the epicenter of global luxury interiors demand—continues to exhibit resilient order flow even as broader home-furnishings markets soften, demonstrating genuine pricing power and brand stickiness. Tariffs will create noise over the next few quarters, but management has credible levers across price, sourcing, and mix to fully offset the impact over a 12–18 month window. With an extraordinarily clean balance sheet, consistent cash generation, and a decades-long track record of buying back stock at steep discounts, capital allocation remains a core part of the thesis. The combination of low float, high insider alignment, and depressed EV/EBIT multiples sets up a meaningful re-rating if discretionary demand stabilizes or if the company adopts a more explicit capital-return framework. Given the ongoing consolidation in luxury décor and design houses globally, Colefax also carries under-priced optionality as a strategic acquisition target.

Pitch Summary:
American Eagle is a Gen Z-focused retailer with denim strength and a growth engine in Aerie/Offline activewear. After a disastrous Q1 with inventory write-offs, guidance cuts, and sales declines, the stock is down ~50% YoY. Aerie’s stumble stemmed from fashion misses and external factors (tariffs, cold weather), but long-term growth trends remain intact. The July 2025 Sydney Sweeney “Has Great Jeans” campaign went viral, driving all-time high web traffic and sold-out SKUs, setting up strong back-to-school sales. AEO also executed a 10% ASR buyback around lows, improving EPS outlook. With $0.50 dividend, clean balance sheet, and a CEO with large equity ownership, management is aligned. The setup is favorable: high short interest, low expectations, but brand interest peaking. If Aerie regains growth and denim benefits from campaign momentum, EPS could rebound to $1.50 and the stock rerates to 10–12×, offering 40–70% upside.

BSD Analysis:
Q1: sales declines in both AE & Aerie; $75m inventory write-off; ASR completed ($200m, ~10% shares). Dividend $0.50. Supply chain now <5% China by YE25.

Pitch Summary:
Freightos runs a digital freight marketplace (Webcargo, Freightos.com) and a data subscription business (FBX index, pricing). 65% of revenue comes from subscriptions, 35% from marketplace take-rates. With ~80% market share in air freight booking platforms, Freightos enables price discovery, instant booking, and tracking. Despite being left for dead post-SPAC and freight downturn, KPIs (GBV, transactions, revenue) continue to rise. The platform benefits from opacity in freight forwarding and cartel-like commission structures. Strong network effects arise as data + marketplace reinforce each other. Blue-sky potential includes scaling into ocean freight, belly cargo utilization, and higher take-rates. Strategic shareholders (Qatar Airways, FedEx, SGX, Prudential) add credibility.

BSD Analysis:
Run-rate GBV ~$1.3b; take-rate 0.83%; >70% airlines onboard; gross margin >72%; targeting EBITDA breakeven by 2026.

Pitch Summary:
UiPath positions itself as the enterprise orchestration and execution layer of agentic AI. Rather than competing with LLM developers, it provides the secure, governable, and scalable infrastructure to operationalize AI in enterprises. Its platform integrates bots, AI agents, and humans with compliance-ready workflows. The new Anthropic MCP protocol enhances rather than threatens its value. Customer traction with Maestro shows early adoption, and Gartner has again named it RPA leader. Financials show revenue growth, positive FCF, and cash-rich balance sheet. Stock is down 86% from ATH, offering asymmetric upside if growth stabilizes and adoption scales.

BSD Analysis:
Q1 FY26: Rev $357m (+6% YoY); ARR $1.693b (+12%); NRR 108%; GAAP op loss $(16)m vs $(49)m LY; Non-GAAP op inc $70m (20% margin); FCF $117m; Cash $1.59b.