Fintechs that fail to embed AI into their operating model will find it increasingly difficult to orchestrate an exit, according to investment bank and tech advisory firm Artis Partners.
Embedded AI has become a fundamental trigger for enterprise software acquisitions, reshaping how strategic buyers select targets, according to Victor Basta, managing partner at Artis Partners. “Without a deeply embedded AI story, soon it will probably become impossible for any digital-first business to succeed in terms of getting an exit,” he says.
Most strategic buyers — particularly mid-market public companies and larger private equity-backed platforms — are acquiring businesses which have successfully embedded AI into their product functionality and operational delivery, says Basta.
“These companies don’t manifest as AI businesses. They’re not on a Gartner AI list,” he adds. “But that capability ‘under the hood’ is exactly what buyers are chasing. It’s about acquiring businesses with customers, product, and domain strength, but with AI capability already built in.”
This marks a clear shift from 12 months ago, when AI-native model-builders and enterprise software companies operated in separate market segments. Today, strategic buyers no longer separate these categories, as adoption quickly becomes more use case driven rather than infrastructure led. Additionally, buyers are assigning higher valuations based on perceived differences in how deeply companies have embraced AI credibly.
Recent deals Artis advised on highlight this dynamic. Ravelin Technology, acquired by Worldpay, leverages embedded AI for merchant fraud detection. Likewise, businesses as diverse as digital mental health platforms and HR enabling software are in the process of being acquired based on their ability to support customers with AI capability tuned to their specific use case. Neither of these examples would position themselves as AI-native, yet embedded AI significantly underpins their strategic value.
“In a year or two, there will be no software that isn’t AI, so the current distinctions driving exit values will no longer apply, but for the moment it is making the difference between prices of 100 and 200 for similar businesses,” says Basta. “Buyers understand this and are acting now to build capability from within.”