The convergence of integrated software, efficient hardware and modern networking infrastructure has created a new technology environment. Industry 4.0 sits at the convergence of these technologies and enables many industries that we actively track. Catalyst Investors’ history in software and TMT is quite relevant to Industry 4.0. We are excited to meet and partner with growth stage companies that are built as Industry 4.0 solutions from the ground up, as well as existing service businesses that can adopt Industry 4.0 technologies as an evolution.

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INDUSTRY 4.0 OVERVIEW
April 2020
Jackson Evans & Tyler Newton

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“…the fourth industrial
revolution creates a
world in which virtual
and physical systems of
manufacturing globally
cooperate with each
other in a flexible way…”
- Klaus Schwab, Founder and
Executive Chairman of the
World Economic Forum
WHAT IS INDUSTRY 4.0?
Originally coined by the German Ministry of Education and Research to promote the digitization of manufacturing…
The “Fourth Industrial Revolution” is characterized by the convergence of digital systems and networks within the physical realm of manufacturing
18th and 19th centuries
Steam power and large scale manufacturing: coal, textiles, steel, railroads, mechanization of
agriculture
Early to mid 20th century
Oil, electricity and mass production: autos, appliances, refrigeration and A/C, radio, TV, film,
airplanes, chemicals, plastics, consumer packaged goods, department stores
Late 20th to early 21st century
Computers and mass customization: hardware, software, cable/satellite TV, wireless networks,
single-purpose manufacturing robots, internet, digital media, global supply chains, big box stores,
smart phones, ecommerce, social networks, gig economy, cloud computing
Now to future
Cyber-physical systems powered by cognitive computing: IoT, 5G, robotic process automation,
prescriptive analytics, edge computing
Industry 1.0
Industry 2.0
Industry 3.0
Industry 4.0
Catalyst’s take: While the concept was originally tied to manufacturing, many of the enabling technologies can
be applied to automating service industries as well. The value is an increase in productivity for developed
market labor whether in supply chain, real estate, healthcare, agriculture, manufacturing or other services.

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Industry 4.0 characterizes the convergence of modern technologies, creating an
opportunity for all investors (technology, infrastructure, business services, etc.). We
are focused on a subset of the industry where software layers that syndicate various
devices, information and services will serve as the platform for which other firms can
build their own offerings.
MARKET OVERVIEW
Source: Marketsandmarkets, The Manufacturer and Deloitte.
Historical Growth Impediments
Where Is It Relevant?
Lack of universal standards
Costly implementations with
questionable ROI
High power consumption and
lack of bandwidth
Data regulation and
security concerns
Adjacent Sectors
$27BN
Industrial and Manufacturing
software spend in 2024
Applications driving spend include ERP software, product lifecycle management, inventory
tracking, CRM systems, demand planning and manufacturing operations management
Technologies expected to
have the greatest impact
on TMT organizations over
the next 5 years
$717 BN
Smart Cities market by 2023
$20 BN
North America IoT Middleware Market

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TECHNOLOGIES DRIVING INDUSTRY 4.0
Hardware Software
Network & Connectivity
Source: Forrester.
Technology Enables
• More bandwidth
• Lower latency
• Extended coverage
• Edge computing
• 5G
• WiFi & Bluetooth
• Towers
Technology Enables
• Size & power
• Compatibility
• Connectivity
• Range
• RFID
• Cameras
• Physical sensors
• Batteries
Technology Enables
• Integrations
• Speed
• Functionality
• Platforms
• Cloud
• APIs
• Containers
While Industry 4.0 may imply connections to manufacturing, we believe that it is also a more broad characterization of
the ability of existing software and processes to permeate previously untapped industries and verticals by leveraging
new, and improved, technologies (5G, edge computing, sensors, etc.)
Building Blocks… …Driving New Technology Applications
At Catalyst, we see opportunity in tech-
enabled services that combine the above
technologies into solutions that solve
particular business problems or processes,
both vertical and horizontal
▪ Connectivity: IoT platforms, network security, fog
computing, big data and data lakes, AI / ML,
predictive analytics, visual recognition
▪ Human-machine interfaces: AR / VR, natural
language processing, wearables
▪ Smart machines: autonomy, advanced logistics, 3D
printing, simulation, industrial IoT
▪ Advanced: nanotech, genomics, quantum
computing, digital-biological interfaces

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IMPLICATIONS OF INDUSTRY 4.0
On Industries
▪ Modernize “lagging” industries: real estate, retail / supply chain, public sector, transportation and healthcare
▪ Importance of network security for highly connected systems
▪ Ongoing trade off between privacy and convenience – tech companies will continue to drive this shift
▪ Industry wide standards will make implementation and product selection easier for enterprises
On Processes
▪ Automation of mundane functions: payments, accounting, payroll, ordering, inventory, scheduling, check
out, delivery, loyalty, marketing, compliance, monitoring and maintenance and customer service
▪ Increase efficiency of resource utilization for both productive and environmental benefit
▪ Cloud-based software, APIs and databases will add flexibility and functionality across the board
On Businesses
▪ May require more capital to get off the ground, but offset by multi-year and pre-paid agreements
▪ Business models may have a hardware component and “lumpy” sales in early days
▪ Recent trend of using cheap labor will be disrupted due to increased automation and rising minimum wages
▪ Ability to “re-shore” supply chains and speed up responsiveness to changes in demand / data
Beyond the direct impact of Industry 4.0 on manufacturing and industrial operations, there will be ancillary effects
throughout all industries, business processes and operations
Customer care technology combining AI-
driven chatbots, IVR, website content and
analytics to interface with customers and
provide solutions to their issues
Automated check-in / check-out systems for
retailers and restaurants that integrate with
back-office applications
MSSPs geared toward Industry 4.0 systems
for certain verticals with expertise in sector
compliance and regulation
Automated logistics systems for specific
supply chains, including warehouse
automation, asset tracking and inventory
management
Solutions to modernize healthcare,
government, transportation and education
utilizing Industry 4.0 technologies
Opportunities for Catalyst

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ILLUSTRATIVE PROVIDERS – OLD & NEW
Back-end
SoftwareApplications
Supporting
Technology
Telecom Hardware
IoT & ERP Platforms Data & Analytics Business & Security Tools
Note: This is not meant to be an exhaustive list but rather a sample of a few industry players and sectors (horizontal & vertical).
Monitoring & Tracking
VerticalHorizontal
Real Estate & Warehouse Retail & Supply Chain Manufacturing Urban Operations

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Please send any inquiries to jackson@catalyst.com