Indian technology sector witnesses surge in deal values amid decline in volumes
The Indian technology sector experienced a significant boost in deal values in the third quarter of this year, according to a report released on Thursday. The report, conducted by Grant Thornton Bharat, revealed that there were 87 deals worth $1.4 billion during this period, representing a 40% increase in values compared to the previous quarter. However, the report also noted a 13% decline in deal volumes from July to September.
The rise of generative AI has played a crucial role in reshaping the industry, with leading tech players actively adopting and leveraging this technology to enhance efficiency across various sectors. Grant Thornton Bharat emphasizes the importance of innovation in areas such as spacetech, SaaS, AI, and cloud, urging investors to navigate the changing landscape by re-evaluating their investment strategies. Raja Lahiri, Partner and Technology Sector Leader at Grant Thornton Bharat, highlights the need for the tech industry to prioritize innovation amid an 88% decrease in deal values compared to the previous year.
In terms of mergers and acquisitions, the third quarter witnessed 20 deals worth $882 million, reflecting a 9% decline in volumes compared to the previous quarter. However, there was a substantial 573% increase in deal values during this period.
Noteworthy investments in AI-driven companies include MapMyIndia’s $1.1 million investment in Mappls KOGO, an AI-driven travel advisor, and Agritech start-up Leads Connect securing $60.2 million from BL Agro Industries. The tech industry’s largest deal in the SaaS market was the Proximus Group’s acquisition of a majority stake in Route Mobile for $721 million, as outlined in the report.
In the private equity landscape, the technology sector experienced a marginal decline in deals, with 67 transactions amounting to $564 million. This reflects a 14% decrease in volumes and a 37% decline in deal values compared to the previous quarter. Notable investments during this period include Nazara Technologies securing funding of $62.2 million from SBI mutual fund schemes in the technology startup segment. Perfios also received a substantial investment of $229 million from Kedaara Capital, marking one of the largest B2B SaaS deals of the year. Additionally, there were three IPOs collectively valued at $253 million in the IT sector during this period.
The Indian technology sector continues to evolve, with the surge in deal values indicating significant opportunities for innovation and growth. Despite the decline in deal volumes, strategic investments in emerging technologies such as generative AI, SaaS, and spacetech will be key in navigating this evolving landscape.
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