Digital Commerce M&A Activity Rises, But Investors in the Sector Remaining Selective and Focusing on Profitability

London, UK – 09/09/2024. The latest Digital Commerce M&A report from Hampleton Partners, the international M&A and corporate finance advisory firm for software and technology companies, reveals that 1,089 deals were struck in the sector in 1H2024, compared to the 1,063 deals recorded in the previous six-month period.

The modest uptick in M&A activity reflects a degree of market recovery following the post-pandemic decline. However, macroeconomic challenges and geopolitical tumult continue to have an impact, as can be seen in a fall in the trailing 30-month median revenue multiple, which has dropped for the second six-month period in a row.

Against this backdrop, it’s the EBITDA multiples which now count in dealmaking, with investors prioritising profitability over growth. While the deal flow remains high in the Internet Services & Portals and Agencies & Services Providers segments, it’s clear that the wheat is being separated from the chaff.

The new Hampleton Partners report highlights AI as a key energising factor in the Digital Commerce market, with AI solutions being leveraged to optimise the handling of challenges as disparate as inventory management and content creation. Amazon’s influence is also being hugely felt, thanks to the utilisation of Amazon’s comprehensive marketing solutions by e-commerce vendors to tailor engagement.

“Widespread take-up of innovations such as generative AI, cloud-based analytics and programmatic marketing suites like Amazon’s toolbox is allowing both legacy companies and digitally-native firms to effectively adapt to today’s consumer landscape,” says Hampleton Partners sector principal Ralph Hübner. “We anticipate the revitalised activity will drive M&A within the wider ecosystem.”

Over the past 30 months, the top three most prolific buyers within the Digital Commerce space have been:

• Playmaker Capital – 6 acquisitions, including Ledger Bennett (B2B marketing agency), eprofessional (Digital marketing & advertising agency), PivotRoots Digital (Digital marketing & advertising agency)
• Frasers Group – 6 acquisitions, including Wiggle (online sporting goods retail), Matchesfashion (online accessory retail), and boohoo group (online apparel and accessories)
• eBay – 4 acquisitions, including Goldin Auctions (Online collectibles auction marketplace), myFitment (E-commerce catalog management SaaS), and Knownorigin (Online NFT marketplace)

Hampleton Partners’ M&A Market Reports are compiled using data and information from the 451 Research database (www.451research.com); Capital IQ, CB Insights, Gartner, IDC and more.

Hampleton Partners advises technology company owners on M&A and growth financing transactions with strategic buyers or financial investors. Hampleton’s experienced deal makers have advised hundreds of tech industry shareholders and provide hands-on expertise and unrivalled advice to entrepreneurs looking to sell their companies, partially exit, or to accelerate growth.

With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Enterprise Software, Digital Commerce, IT & Business Services, Artificial Intelligence, Autotech & Mobility, Cybersecurity, Fintech, Healthtech, HR Tech, and Insurtech.

Follow Hampleton on LinkedIn.