M&A Market Dynamics – Software & Technology
- Deal volume increased 10% in the first six months of 2021 when compared to the first six months of 2020, with the number of transactions climbing to 1,921
- Real Estate, Education, and Healthcare were the most active verticals for Software M&A activity during the second quarter of 2021
- Software and Technology M&A expects to maintain increased activity as it remains a select sector benefiting from the COVID-19 pandemic. Improved balance sheets, low interest rates, and a surplus of dry powder will continue to boost activity during the second half of 2021, despite a spike in cases and hospitalizations due to new variants of the novel Coronavirus.
Sector Spotlight – E-Commerce and Retail
During the pandemic, buying online became a norm for all consumers. As in-person activities start to resume and consumers return to shopping in person, retail and e-commerce will have to adapt once again.
Traditional stores with clerks and sales assistants may become nearly obsolete shortly. Emerging technology will likely result in a contactless sales model allowing retail companies to eliminate intermediaries, collect more information on customer bases, and raise profit margins. By implementing direct-to-customer models, tech companies will have ample opportunity for growth and expansion and strategic partnerships with large retail chains and e-commerce companies alike.
The expansion of tech into existing verticals including retail will allow tech companies to continue to grow at the impressive rates experienced over the past year while also streamlining operations for retail companies.