9 Key Takeaways from Our New Tech Market Reports

Since the start of the year, Hampleton Partners has released a series of M&A reports providing incisive analysis of some of the most significant sectors in tech, including Digital Commerce and Autotech.

Discussing the most active M&A dealmakers, analysing prominent trends determining the course of each sector, and putting a spotlight on specific transactions, the reports provide valuable briefings for tech owners and decision makers. Here are just some of the key insights our readers have gleaned so far this year.

Our Enterprise Software report reveals a very bullish market indeed, with the sector expected to grow by 16.8% by the end of this year. Much of this growth is being propelled by unprecedented demand for highly specialised SaaS software solutions that meet the precise demands of specific verticals. 

Indeed, as our report points out, a whopping 85% of all corporate applications will be utilised via the SaaS model by 2025. The recurring revenue generation of subscription-based software makes SaaS startups appealing to investors seeking reliable ROI. We’ve previously noted that Enterprise Software could be considered a “recession-proof” tech sector because of the revenue models at play.

Within Enterprise Software, the Enterprise Applications subsector is where the highest number of M&A deals have been taking place, by a significant margin. This subsector encompasses ERP, SCM and CRM companies, and our report reveals that it’s non-HR ERP companies that have been attracting the most acquirers. ERP companies specialising in HR management come a close second when it coms to M&A activity. 

Autotech is about far more than EVs, battery charging solutions and other eye-catching elements of the electric vehicle revolution. There’s a flourishing ecosystem of startups catering to a burgeoning demand for in-car software and data-driven mobility services, which – as our report notes – is estimated to generate up to $1.5 trillion by 2030. Cars are now platforms for tech just as our laptops and phones are, with automatic online upgrades increasingly taking the place of garage visits. 

As with Enterprise Software, the Autotech space has seen mushrooming demand for SaaS solutions. Companies such as Custeed, which creates tools allowing car dealers and garages to monitor customer satisfaction information and generate leads, and Infosite Technologies, which provides management tools for the haulage industry, have been attracting copious investors and acquirers. Indeed, a glance through our report reveals that the most prolific M&A players have shown an insatiable appetite for SaaS firms. 

Demand for IT & Business Services companies is sky high. Our newest report on the sector spells it out in hard numbers. While there was a decline in deal volume in the latter half of 2022 (which was in keeping with the wider tech downturn), transaction numbers were still significantly higher than what was seen in the equivalent period the year before. All this eager activity on the part of acquirers reflects strong demand for IT & Business Services firms, with CEOs and CFOs recognising that investing in tech solutions is essential for staying agile and viable in our post-lockdown, hybrid working reality. 

Our report reveals that Accenture, long a prominent M&A player, is the number one acquirer of IT & Business Services companies. And that’s by a gigantic margin. Over the past 30 months, it has made 72 acquisitions, targeting companies like leading market research firm Fiftyfive5 and data science leader ALBERT Inc. By contrast, the second-most prolific acquirer in this sector, Deloitte, racked up a relatively modest 23 takeovers. 

It’s well known that the Digital Commerce sector has had a bumpy ride over the past few years. The lockdown period led to a feeding frenzy among investors, as online retailers and delivery companies suddenly became vital to the everyday lives of billions of people. This was followed by a sudden post-lockdown hangover, and drop in deal activity. 

However, our latest Digital Commerce report shows there was a marked rise in transaction numbers towards the end of last year. And, importantly, numbers had achieved a higher level than at any point between 2016 and 2019. In other words, the market has looked to have merely normalised after the “artificial” acceleration brought on by the pandemic.

Our report shows that dozens of e-commerce payment solutions providers have been purchased over the past few years, making this one of the most active subsectors when it comes to M&A. One of the biggest transactions was Shift4’s $575 million purchase of cross-border payment provider Finaro. The company had been founded to address a specific pain point: namely, the fact that 30% of online purchases are cancelled when clearing banks refuse to approve transactions across different countries. It’s an aspiration that has paid off handsomely for the e-commerce fintech.

HRTech has taken on special significance in the post-pandemic, post-Great Resignation world. Not only are companies in this space receiving record levels of investment, but our latest HRTech report reveals that no less a player than Y Combinator – arguably the world’s best-known tech accelerator – is one of the most prolific investors in HRTech companies. This kind of interest underscores the excitement around this sector, and we expect to see plenty of disruptive startups to emerge here in 2023 and beyond.

This list of takeaways is just the tip of the info iceberg. Download all our reports right now, right here.