Each quarter we aim to keep you up to date with a concise review of the M&A and fundraising activity in the Technology Sector in GSA, together with a look at capital markets activity, valuation levels and a deep dive into relevant sector issues with insights from our KPMG experts.
In this issue:
- Mergers & Acquisitions: The M&A market continued to be impacted by rising inflation, recession risks, supply chain issues in the semiconductor market, and geopolitical tensions, leading to a further deceleration. The number of deals in the technology sector in the GSA region decreased by 13% in 2Q2023 compared to the previous quarter, falling back to the level of 3Q2021.
- Funding activity: After VC funding activity improved in 1Q2023 despite unfavorable market conditions, the impact of ongoing geopolitical tensions and recession fears made itself felt with a slight decline in 2Q2023. Whereas early-stage VC deals saw a slight increase in funding activity.
- Valuation levels: Valuation metrics increased in most subsectors, mainly due to increased investor confidence in listed technology companies and the growing importance of generative AI as a promising technology.
- KPMG Insights: The global COVID pandemic displayed IT's ability to drive innovation at a remarkable pace and scale, with companies embracing digital transformation to enhance customer experience. However, IT still faces pressure to deliver more efficiently while addressing talent acquisition and cybersecurity risks. Prioritizing ethical practices will be crucial for success in navigating the changing business landscape.
KPMG's recent report, “Preparing for the future of IT” explores key prevailing trends of IT along with future requirements that will shape the adoption of IT by organizations to drive success and remain competitive.
