FT : Germany is failing to protect power groups from cyber attacks, warns Eon bo

Germany is failing to protect power groups from cyber attacks, warns Eon boss
Operator of the country’s largest network urges authorities across Europe to do more to protect key assets

Germany is failing to protect critical infrastructure from cyber attacks, the head of one of the country’s biggest power companies has said, urging authorities across Europe to do more to safeguard crucial assets.

Leonhard Birnbaum, chief executive of Eon, which operates Germany’s largest gas and electricity distribution network, told the Financial Times that he believed he would be “on my own” in the event of a serious hack.

Birnbaum said his company, which also operates power grids in eight other European countries including Sweden, Hungary and the Czech Republic, was “constantly” subjected to systematic cyber attacks, including some by suspected state-backed actors. 

Yet he said he had little confidence he would receive support from the German state if Eon suffered a serious successful attack, despite the country’s promise of a “sea change” in its approach to defence and security in the wake of Russia’s invasion of Ukraine.

“In Germany, I clearly feel that if I really [am] subject to a successful attack, I’m on my own,” said Birnbaum.

He said that when he asked executives at other companies that had come under attack about the support they received, “the answer was nil.” He added: “That cannot be the right approach.”

Germany has promised to increase investment in fighting cyber attacks and protecting critical infrastructure and in June, the government published its first ever national security strategy — part of an attempt to confront the consequences of the Russian invasion, which caught many in Berlin by surprise.

Birnbaum, who is also president of the EU industry body Eurelectric, criticised the fragmentation of cyber attack response units in Germany — where there is a separate team for each of the 16 federal states as well as one at national level — but also across the EU.

He said that all of the cyber threat experts should be brought together in a single team under a pan-European agency.

“We need a European response because we are going to be attacked across Europe all together. And we need the best talents. The attackers are actually crossing country boundaries . . . Why should we stop at a country boundary?”

Experts have long warned that critical European infrastructure such as power and gas networks is vulnerable to attacks by foreign actors — a concern that has deepened since the invasion of Ukraine. 

In late 2015, parts of western Ukraine suffered power outages after the first known successful cyber attack on an electricity grid. Kyiv was hit by another attack the following year. 

The EU has an agency for cyber security, known as Enisa, but Matthias Schulze, a cyber security researcher at the German Institute for International and Security Affairs, said it was “mostly an information sharing platform for sharing information on best practices and guidelines for enhancing cyber security”.

Enisa said that national governments were responsible for responding to cyber security incidents and problems with critical infrastructure.

The European Commission said that it took cyber attacks seriously, adding: “The EU has mechanisms in place for cyber crisis co-ordination at all levels: technical, operational and political, in the event of a large scale cyber attack.”

Schulze said Birnbaum was far from the only industry executive who was “frustrated” about the fragmentation of the response network. He argued that Germany had made some progress thanks to the establishment of a national cyber defence centre by the interior ministry but said it was still not always clear “who would be in charge” during a cyber attack.

Germany’s interior ministry said in a statement that its office for information security could advise and support operators of critical infrastructure in the event of serious cyber incidents.

It added that it was working to improve the country’s resilience to cyber threats, pointing to a proposed legal change that would make it easier to counteract “serious, cross-border cyber attacks” as well as plans to expand and centralise teams working on cyber crime.

FT : VCs tell start-ups to delay IPO plans after Arm and Instacart underwhelm

VCs tell start-ups to delay IPO plans after Arm and Instacart underwhelm
Tech debuts were overshadowed by concern about interest rates, frustrating hopes for a rush of listings

Venture capitalists are advising start-ups to postpone plans to go public in the US until interest rates have plateaued, after choppy debuts for Arm and Instacart damped hopes for a rush of new tech listings.

Online grocery delivery company Instacart, whose initial public offering on September 19 was seen as a key barometer for other private tech companies, ended the month below its $30 listing price, despite surging as much as 40 per cent as trading began.

Arm, the SoftBank-backed chip designer, fluctuated above and below its $51 listing price in the two weeks following its IPO but ended the month almost 5 per cent above it. Marketing automation software company Klaviyo is the best performer of the three, up 15 per cent on its IPO price.

All three companies enjoyed bright starts on the public markets, but those were dimmed by the Federal Reserve indicating on September 20 — the day of Klaviyo’s debut — that it would support another interest rate rise this year and fewer cuts than expected in 2024.

Turbulent trading conditions throughout September have frustrated Silicon Valley investors who had hoped the month’s listings would open the door to dozens more private tech companies going public. Many start-ups had delayed their IPO plans after the market turned sour in 2021.

“In our portfolio we would advise: unless you really need to, hold back,” said Mike Volpi, a general partner at venture capital firm Index Ventures. “The market has been rough in the past few weeks . . . Unless you need to go out, I’d wait until the second half of next year.”

With public listings remaining risky, the start-ups most likely to IPO next were “the ones forced to by factors beyond the traditional goals of raising growth capital or providing liquidity”, said Jason Greenberg, co-head of global technology, media and telecoms investment banking at Jefferies.

Private markets data company PitchBook estimates that a backlog of almost 80 IPO candidates has built up over the past year, a period in which public markets have soured on tech start-ups. But some investors have tried to take a longer-term view.

“Everyone thought IPOs were dead — they aren’t,” said Paul Kwan, a managing director at venture firm General Catalyst and the former head of west coast tech banking at Morgan Stanley. September’s trio of listings “wasn’t some massive turning point”, he added.

Interest rate rises are particularly painful for unprofitable private start-ups, which are valued on the basis of their future cash flow. Until rates stabilised, Kwan said, there was unlikely to be a resurgence in IPOs. He expected an increase in mergers and acquisitions among private companies over the next six months.

Some companies might be forced to list sooner rather than later because they needed fresh capital to survive or grow — “not a good IPO story”, warned Greenberg — or to pay tax bills associated with employee stock units’ vesting.

In recent years, many private Silicon Valley companies — including Instacart, Klaviyo and payments group Stripe — have offered staff “restricted stock units” that allow them to cash in when a company is acquired or goes public.

In March, Stripe raised more than $6.5bn in a private stock sale, in part to cover the employee tax liabilities associated with those RSUs vesting. Instacart would be using “effectively all” of the roughly $600mn in proceeds from its IPO to settle costs associated with RSUs vesting, according to a person with knowledge of the matter and the company’s S1.

Klaviyo is using almost $60mn of the proceeds of its IPO to settle outstanding RSUs.

A third factor driving start-ups to the public market is their investors’ need for liquidity, according to Don Butler, managing director at venture fund Thomvest.

Venture firms invest on a longer-term basis than private equity or public investors, with funds typically operating on a 10-year lifecycle. The return on investment from such funds is a proof point when raising their next fund from backers, who typically include pension funds, endowments and other institutional investors.

But venture capital firms need start-ups to IPO or find another exit, such as a sale, in order to distribute returns to their investors. Some would accept that their companies were not as valuable as once thought if that meant getting a deal done, said Butler.

Instacart, Klaviyo and Arm were evidence that “the IPO window is open — even if a crack by historical standards”, said Peter Hébert, co-founder of venture firm Lux Capital.

“While public investors are far more discerning than in recent years, mature companies with attractive growth prospects can raise public money if they so desire,” said Hébert.

Klaviyo provides a more hopeful signal to other prospective IPO candidates serving business customers, rather than consumers. The marketing technology company continued to grow rapidly through the pandemic while others were cutting back and is trading close to its peak private valuation of $9.5bn, set in 2021.

So-called “software as a service” businesses such as Klaviyo tend to offer public-market investors more predictable revenues, as customers pay a monthly subscription, than consumer-facing companies like Instacart.

However, according to Greenberg, the prospects for even the strongest IPO candidates are unlikely to be clear until interest rates have definitively plateaued and the economic outlook is more settled.

“Is the window open? 100 per cent,” he said. “Do I think listings will take off? No. Not for another six months.”

CrunchBase : The 10 Biggest Rounds Of September: Anthropic And Stack AV Lead Big

Last month, we talked about how hot it was for big funding deals in August.

September did not cool down.

There were two raises of $1 billion or more this month, and it took at least $210 million to make this list. Of course, AI played a role, but so did autonomous driving, biotech, batteries and more. Let’s take a look at exactly what all made the list this month.

1. Anthropic, $1.25B, artificial intelligence: Many startups are having difficulty fundraising, but not Anthropic. The San Francisco-based company — a ChatGPT rival with its AI assistant Claude — inked a deal with Amazon for the e-commerce and cloud titan to invest up to $4 billion in the AI startup. The new investment gives Amazon a minority stake in Anthropic. The immediate investment is $1.25 billion, with either party having the right to trigger another $2.75 billion in funding, Reuters reported. As part of the deal, Anthropic will now use Amazon Web Services data centers, as well as AWS Trainium and Inferentia chips to build, train and deploy its models. Anthropic did not announce a new valuation with the round. The new investment is just the latest in what has become a fundraising spree for Anthropic this year. In February, it was reported that Google had invested between $300 million and $400 million in the startup. In May, the company raised a $450 million Series C led by Spark Capital. Finally, just last month, Anthropic raised a $100 million round from SK Telecom.

2. Stack AV, $1B, autonomous driving: Brand-new self-driving, commercial trucking startup Stack AV blasted onto the scene in September with this round. The company was founded by the same folks behind autonomous vehicle startup Argo AI — which shuttered last year — and just like their previous company, they have brought out big-name investors with cash. Bloomberg reported that SoftBank Group is backing the new venture with more than $1 billion. Crunchbase data shows the round is the third-largest ever for a Pittsburgh-based startup, behind only two of Argo AI’s rounds.

3. Databricks, $500M, data: AI-enhanced data analytics company Databricks raised more than $500 million in a Series I led by funds and accounts advised by T. Rowe Price Associates. The deal values the company at $43 billion, a boost from the $38 billion valuation San Francisco-based Databricks received after raising a $1.6 billion Series H led by Morgan Stanley’s Counterpoint Global in 2021. The new round also included chip-making giant Nvidia, which has been busy of late investing in AI startups. Databricks also says it’s recently passed some impressive financial milestones, including surpassing the $1.5 billion revenue run rate at more than 50% revenue year-to-year growth during the second quarter ended July 31. The company says it ended that quarter with more than 10,000 global customers. Since being founded in 2013, Databricks has raised more than $4 billion, per Crunchbase.

4. Ascend Elements, $460M, batteries: There have been big raises recently when it comes to the EV battery market. Carson City, Nevada-based battery recycling startup Redwood Materials snagged a massive $1 billion-plus round. Then Ascend Elements snapped up a $460 million Series D. The Westborough, Massachusetts-based startup is a manufacturer of sustainable battery materials for EVs. The round was led by Decarbonization Partners — a partnership between BlackRock and Temasek focusing on companies in the decarbonization space — Temasek and Qatar Investment Authority. Founded in 2015, Ascend has now raised $1.5 billion.

5. Denodo, $336M, data: One of the less talked about deals of the month was a big investment into data management firm Denodo. The Palo Alto, California-based company received a $336 million Series B from TPG. The transaction included both primary capital and a secondary sale of shares by HGGC — which invested in the company’s Series A back in 2017. Denodo provides customers with a data integration, management and delivery platform.

6. Sierra Space, $290M, space: Space tech funding isn’t what it used to be, but don’t tell Sierra Space. The Louisville, Colorado-based commercial space startup raised a $290 million Series B co-led by MUFG, Kanematsu Corp. and Tokio Marine & Nichido Fire Insurance. The round values the company at $5.3 billion. Sierra has been in the development stage of the first commercial space station for five years and will use the new cash to forge new partnerships. In 2021, the company closed a $1.4 billion Series A investment led by General Atlantic, Coatue and Moore Strategic Ventures.

7. Mapbox, $280M, logistics: SoftBank founder Masayoshi Son told investors months ago that his multinational investment holding giant would again be shifting from “defense mode” as it looked to be a leader in AI. He has seemed to keep his word, as just days after the successful initial public offering of SoftBank-owned U.K. chip designer Arm — arming the firm with even more cash — SoftBank led a $280 million funding round for San Francisco-based location-mapping startup Mapbox. The startup, whose platform is used by the likes of Toyota and General Motors, is trying to bring AI to help with automated driving and safety. Founded in 2010, the company has raised more than $600 million, per Crunchbase.

8. Generate Biomedicines, $273M, biotech: The Sommerville, Massachusetts-based startup, which has developed a generative AI platform designed to rapidly invent new drugs, raised a $273 million Series C financing. The company did not name a lead investor, but mentioned one of the new investors is NVentures, Nvidia’s venture capital arm. Founded in 2018, the company has raised nearly $700 million to date, according to Crunchbase data.

9. Indigo, $250M, agtech: Boston-based Indigo locked up a $250 million round co-led by Flagship Pioneering, State of Michigan Retirement System and Lingotto for its agriculture sustainability platform. Indigo says its platform helps farmers maximize their profit from sustainability practices while also improving soil quality. Founded in 2013, the company has raised $1.4 billion, per Crunchbase.

10. Nimbus Therapeutics, $210M, biotech: It was just about a year ago that Cambridge, Massachusetts-based Nimbus Therapeutics made this list, and now it’s back. The clinical-stage medicine developer collected a $210 million round co-led by new investor GV and existing investors SR One and Atlas Venture. In March, Nimbus sold a still-experimental psoriasis drug to Takeda in a deal that could be worth as much as $6 billion. Founded in 2009, the company has raised $637 million, according to Crunchbase data.

CrunchBase : The Week’s 10 Biggest Funding Rounds: Anthropic Goes Large Again, S

The Week’s 10 Biggest Funding Rounds: Anthropic Goes Large Again, Sierra Space Blasts Off
AI, space and biotech were the big winners this week, raising more than $2 billion in the top five rounds.

The last several weeks have definitely seen the big megarounds come back. Will investors keep it up as we enter fall? Time will tell.

1. Anthropic, $1.25B, artificial intelligence: It may be hard for some startups to fundraise, but not Anthropic. The San Francisco-based company — a ChatGPT rival with its AI assistant Claude — inked a deal with Amazon for the e-commerce and cloud titan to invest up to $4 billion in the AI startup. The new investment gives Seattle-based Amazon a minority stake in Anthropic. The immediate investment is $1.25 billion, with either party having the right to trigger another $2.75 billion in funding, Reuters reported. As part of the deal, Anthropic will now use Amazon Web Services data centers, as well as AWS Trainium and Inferentia chips to build, train and deploy its models. Anthropic did not announce a new valuation with the round. The new investment is just the latest in what has become a fundraising spree for Anthropic this year. In February, it was reported that Google had invested between $300 million and $400 million in the startup. In May, the company raised a $450 million Series C led by Spark Capital. Finally, just last month, Anthropic raised a $100 million round from SK Telecom.

2. Sierra Space, $290M, space: Space tech funding isn’t what it used to be, but don’t tell Sierra Space. The Louisville, Colorado-based commercial space startup raised a $290 million Series B co-led by MUFG, Kanematsu Corp. and Tokio Marine & Nichido Fire Insurance. The round values the company at $5.3 billion. Sierra has been in development of the first commercial space station for five years and will use the new cash to forge new partnerships. In 2021, the company closed a $1.4 billion Series A investment led by General Atlantic, Coatue and Moore Strategic Ventures.

3. Avalyn Pharma, $175M, biotech: This was a big week for biotech — as you’ll see — and Avalyn Pharma kicks it off on this list. The Seattle-based company, which develops inhalation therapies for life-threatening pulmonary diseases, raised a $175 million Series C co-led by Perceptive, Xontogeny Venture Funds, SR One and Eventide Asset Management. The company plans to use the cash to continue development of its portfolio of inhalation therapies for lung disease. Founded in 2011, the company has raised nearly $273 million, per Crunchbase.

4. AlphaSense, $150M, artificial intelligence: AI-driven market intelligence platform AlphaSense locked up a $150 million Series E led by Bond Capital at a $2.5 billion valuation — an increase of nearly 30% from its raise just in April. The New York-based startup’s market intelligence and search platform — powered by AI and natural language processing — helps clients form corporate and investment strategies. The raise comes just about five-and-a-half months after the company raised a $100 million round at a $1.8 billion valuation. In total, the company has now raised more than $770 million since its founding.

5. Harbinger Health, $140M, biotech: Back to biotech, as Cambridge, Massachusetts-based Harbinger Health announced a $140 million Series B that included an investment from Flagship Pioneering, which founded the company. Harbinger is developing ways to detect cancer early and enabling new approaches to cancer screening, diagnosis and management. Founded in 2020, Harbinger has raised approximately $190 million, per the company.

6. Alto Pharmacy, $120M, health care: San Francisco-based online pharmacy Alto Pharmacy raised $120 million at an $800 million post-money valuation, per Axios. Investors were not named in the report. Founded in 2015, the company has raised $680 million, per Crunchbase.

7. Evozyne, $81M, biotech: Chicago-based biotech firm Evozyne announced the closing of an $81 million Series B to fund its generative AI-powered drug discovery platform. The round was co-led by Fidelity Management & Research Co. and OrbiMed. Founded in 2020, the company has raised more than $144 million, per Crunchbase.

8. Arc Boats, $70M, electric vehicles: Los Angeles-based electric boat-maker Arc Boats raised a $70 million Series B led by Eclipse. Founded in 2021, the company has raised $100 million, per Crunchbase.

9. Kneron, $49M, artificial intelligence: San Diego-based Kneron, an AI software and hardware developer, locked up a $49 million strategic funding from investors including Foxconn, Foxconn Co-GP Fund and Alltek. Founded in 2015, the company has now raised $212 million, per Crunchbase.

10. Adela, $48M, biotech: Foster City, California-based Adela, a developer of blood testing for cancer detection, closed a $48 million round from several investors, including RA Capital Management. Founded in 2020, the company has raised $108 million, per Crunchbase.

Big global deals
Anthropic led the way globally, but there were big rounds overseas.

  • China-based AI chip startup Enflame raised a huge round worth nearly $274 million from investors including funds linked to a government authority in Shanghai, per a Reuters report. The chipmaker is backed by Tencent.

>>> Barron’s Weekend Summary

Barron’s Weekend Summary: Unemployment remains near historic lows even after the Fed's aggressive rate hikes

Cover Story:
-Unemployment remains near historic lows even after the Fed's aggressive rate hikes. What's behind the job market's resilience---and why it could last? The Fed has lifted interest rates nearly a dozen times since March 2022, to a range of 5.25% to 5.5%. Headline inflation has fallen by two-thirds, from a peak of 9.1% to 3% on a year-over-year basis, and despite a recent uptick is poised to slow further as rent prices cool. Yet, the U.S. unemployment rate sits at 3.8%, a historically low level only slightly above the 3.6% that prevailed when the Fed first began raising rates. And there is little to suggest that unemployment will head much higher soon.

Interview:
-This week, Barron’s published its interview with Ron Shaich, founder and chief executive of Panera Bread. Shaich oversaw Panera through multiple transformations, from its initial public offering in 1991 as Au Bon Pain to its sale, in 2017, to European investment firm JAB Holdings for $7.5B. He also became a key figure in the development of the “fast casual” dining sector, now valued at more than $100B. Today, Shaich is managing partner and CEO of Act III Holdings, a billion-dollar fund that invests in public and private consumer companies and restaurants. He is also chairman of and a lead investor in the Mediterranean restaurant chain Cava Group, which went public in June. in mid-September about his time at Panera, his transition from CEO to investor, his outlook for the restaurant industry, and his forthcoming book, Know What Matters: Lessons From a Lifetime of Transformations, which will be published on Oct. 24 by the Harvard Business Review Press.

Tech Trader:
-Meta looks like an AI hot pick. But, Barron’s feels there’s a problem. For investors, every utterance of the word “Meta ” is an unpleasant reminder of Zuckerberg’s commitment to the metaverse, a mammoth long shot that’s years from ever paying off. Fortunately, the Facebook founder has some other promising things up his virtual sleeve. You could see the market’s metaverse disdain playing out in real time this past week during Meta Connect, the company’s annual developer conference. Mark Zuckerberg kicked things off with the launch of the Quest 3 mixed reality headset, which goes on sale soon for $499. It’s a nice upgrade, with better graphics and sound.

The Trader:
-Three US government programs—the Infrastructure Investment and Jobs Act, the Chips Act, and the Inflation Reduction Act—will help keep the money flowing, come economic rain or shine. Together, the three represent hundreds of billions of dollars in spending and subsidies targeted at upgrading the nation’s roads and bridges, expanding domestic manufacturing of semiconductors, and modernizing the electrical grid, among many other things. The construction and engineering contractors who will be doing a lot of the planning and construction work for the forthcoming projects will be among the main beneficiaries. And three related stocks are: Sterling Infrastructure, a 2023 Barron’s Roundtable pick in January when shares were around $32. The stock has climbed 126% this year, to a recent $74. Quanta Services is up 33% this year and trades for 27 times forward earnings, versus its five-year average of around 16.5 times. Some, though, might be worth considering despite big gains. Daniel Skubiz, a portfolio manager at Ziegler Capital Management, points to MYR Group.
-BofA commodities strategists have a long-term price estimate of $80 a barrel for Brent crude, the international benchmark, which was recently trading for around $96 a barrel. WTI should follow a similar pattern—strategists and futures markets agree that oil prices won’t always be as high as they are now. Higher prices today than those expected in the future gives an advantage to those producers with the ability to drill or frack the most oil today, and those with the most productive near-term uses for their cash flow. In this sense Occidental Petroleum is worth considering. Occidental has been directing excess cash flow to pay down the $10B in 8% preferred stock it issued to Warren Buffett’s Berkshire Hathaway in 2019 to finance the purchase of Anadarko Petroleum. That’s an expensive source of financing—using today’s cash windfall to reduce it will benefit Occidental for years to come. At the same time, Berkshire has been buying up common shares of Occidental, and now owns 25% of the company.

Features:
-Given the frequency of government shutdowns in recent years, investors have largely shrugged them off as nonevents. Traditionally there has been a mild drag on economic growth for the duration of a shutdown, but growth then rebounds by a commensurate amount once Congress passes spending legislation and the government reopens. But the outlook is more worrisome this time around.
-Lawmakers in Washington are once more facing a standoff over spending legislation, leaving the government all but certain to shut down just after midnight on Sunday, Oct. 1. If that happens, an estimated 800,000 workers will be furloughed while hundreds of thousands of others will be working without pay. The vast network of government subcontractors would also be out of work, and unlike their federal counterparts, they wouldn’t receive back pay. Those lost hours of work, and the resulting hit to consumer spending, are estimated to cost the US economy $6B, according to calculations by Gregory Daco, chief economist with EY-Parthenon.

Europe:
-The athletic-gear sector rose after Nike’s earnings report. Nike’s European rivals Adidas and Puma climbed 7.1% and 7.8%, respectively. While analysts acknowledged Nike’s outlook offered some relief against a tough backdrop, they weren’t uniformly betting on the rally to continue. The performance was good enough to convince CFRA Research analyst Zachary Warring to raise his 12-month price target on the stock to $91 from $88 but keep a Hold rating on Nike. He said that at 25 times its forward earnings per share, it looks to be trading at a fair multiple. Future sales in North America were an issue for a number of analysts, with concerns about the resumption of payments on student loans. Nike, Urban Outfitters, and Foot Locker Are Downgraded.

Emerging Markets:
-No update this week

Commodities:
- Copper has dropped to $3.70 a pound, down 13% from a late January high of $4.27. The major driver of the decline is a slowdown in economies around the globe. Germany, for example, is in recession as high inflation and interest-rate increases by the European Central Bank have eaten into economic demand. China’s economic growth has slowed down, too. Copper prices are sensitive to drops in demand from lower economic activity. Consider auto makers producing fewer cars that use copper-based metal products, and home builders using less copper piping. The key is that lower copper prices may indicate industry weakness, and portend lower economic activity and a global recession, at the most extreme possibility. The metal is often dubbed as “Dr. Copper” on Wall Street because demand for it gives a read on the health of the global economy.

Streetwise:
-Jack Hough offers seven picks with market values mostly under $10B, and a predicted stock upside mostly over 20%. Axos Financial a Las Vegas holding company for San Diego–based Axos Bank, which operates mostly online, with $19B in assets, touting competitive rates and low fees. Shares trade at 1.3 times tangible book. Brunswick made a name in billiard tables and bowling pins in the 19th century but today makes boats like Boston Whaler and Sea Ray, plus motors and other components. Everyone knows WD-40 WDFC. Growth is driven by pushing into emerging markets and up-selling customers to fancier lube. Profit margins are depressed by a jump in materials costs and some lost distribution following a significant price hike, but that it expects a rebound and plenty more long-term growth. Encore Wire makes, well, wires. And cables. Encore benefits from infrastructure construction, reshoring, electric-vehicle adoption, and power-grid upgrades. Trex turns sawdust and melted plastic grocery bags into pricey boards used to make decks that can last decades. Trex says its lumber alternatives appeal to environmentalists, and that industry market share in decking can double. Jack Henry & Associates sells software, payment processing, and other technology to 1,600 small to midsize banks.