Indian Tech Sector Sees Surge in Deal Values, Despite Decreased Volume: Report
In the third quarter of this year, the Indian technology sector witnessed a remarkable increase in deal values, reaching $1.4 billion in 87 deals, according to a report released on Thursday. This represents a 40% surge in values compared to the previous quarter. However, deal volumes experienced a decline of 13% during the July-September period.
The industry’s transformation can be attributed to the rising prominence of generative AI, with major tech players actively adopting and utilizing this technology to enhance efficiency across various sectors, as outlined in the report by Grant Thornton Bharat.
Raja Lahiri, Partner and Technology Sector Leader at Grant Thornton Bharat, emphasized the significance of innovation in investment strategies, particularly in areas such as spacetech, SaaS, AI, and cloud. He suggested that investors should focus on navigating the evolving landscape to drive growth, considering the substantial 88% decrease in deal values compared to the previous year.
In terms of mergers and acquisitions, the third quarter witnessed 20 deals valued at $882 million. Although this reflects a 9% decline in volumes compared to the previous quarter, it marked a significant 573% increase in deal values.
Several notable deals were highlighted in the report. MapMyIndia invested $1.1 million in Mappls KOGO, an AI-driven travel advisor. Agritech start-up Leads Connect secured $60.2 million from BL Agro Industries. The acquisition of a majority stake in Route Mobile by The Proximus Group for $721 million was identified as the largest deal in the SaaS market.
In the private equity (PE) landscape, technology deals experienced a marginal decline, with 67 transactions amounting to $564 million – a 14% decrease in volumes and a 37% decline in deal values compared to Q2 2023. Notable investments mentioned include Nazara Technologies securing $62.2 million in funding from SBI mutual fund schemes, and Perfios receiving a substantial $229 million investment from Kedaara Capital, which marked one of the largest B2B SaaS deals of the year. The IT sector also witnessed three IPOs collectively valued at $253 million during the period.
The Indian technology sector continues to undergo transformation, with generative AI playing a crucial role in reshaping the industry. Despite the decrease in deal volumes, the surge in deal values reflects the industry’s resilience and potential for growth. Investors and tech players are expected to adapt their strategies and leverage innovation to navigate the ever-evolving landscape and capitalize on emerging opportunities.
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