Over 190 mergers and acquisitions (M&A) totaling to USD 2.27 billion took place in India’s technology sector since January 2011 and the trend would continue to fill technology gaps and talent requirements.
The start-ups valued at over USD 1 billion “will aggressively pursue acquisitions to beef up key areas including mobile, ad tech, data science, merchant acquisitions, marketplaces, payments and logistics”.
The average deal size stands at USD 11.3 million, lower than that of mature start-up ecosystems such as Israel which is at USD 113 million and the US, which is at USD 57 million.
Volumes and value will continue to rise rapidly. In business to business (B2B) software, cross-border M&A will continue to dominate transaction volumes and values. Whereas, in e-commerce and consumer Internet, domestic M&A transactions will prevail.
Domestic transactions account for over 72 per cent by volumes in M&A activity.”Inbound” M&A transactions were predominantly in B2B software at 53 per cent, whereas domestic M&A transactions in consumer Internet and e-commerce stood at 60 per cent.
Investments in the e-commerce and consumer Internet space have grown 38 times between 2010 and 2014 with deals worth USD 4.2 billion struck in 2014 alone. Of this, Flipkart and Snapdeal accounted for over 50 per cent of the total deal value in 2014.
Internet of Things (IOT) will receive significant venture capital and acquisition interest. With a fear of missing out, hedge funds and private equity funds are investing in ‘new’ Series B (USD 10-25 million) and Series C & D (USD 20-250 million) onwards, “fueling a frenzy in valuations.
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Source – ETRetail.com