The Indian technology sector experienced significant growth in deal values during the third quarter of this year, with a total of 87 deals valued at $1.4 billion. This surge represents a 40% increase in values compared to the previous quarter, as highlighted in a recent report.
Deal Trends and Industry Reshaping
Although deal volumes decreased by 13% in the July-September period, the rise of generative AI is playing a pivotal role in reshaping the industry landscape. Major tech players are actively embracing and leveraging this technology to enhance operational efficiency across various sectors, according to the report by Grant Thornton Bharat.
Raja Lahiri, Partner and Technology Sector Leader at Grant Thornton Bharat, emphasized the need for tech companies to re-evaluate their investment strategies. Lahiri noted an 88% decrease in deal values compared to the previous year, suggesting a shift towards emphasizing innovation in areas such as spacetech, SaaS, AI, and cloud technologies to navigate the evolving market dynamics successfully.
Mergers and Acquisitions (M&A) Insights
The third quarter witnessed 20 M&A deals valued at $882 million, indicating a 9% decline in volumes but a remarkable 573% increase in deal values compared to the previous quarter. Notable transactions include MapMyIndia’s $1.1 million investment in Mappls KOGO, an AI-driven travel advisor, and Agritech startup Leads Connect securing $60.2 million from BL Agro Industries. The Proximus Group’s acquisition of a majority stake in Route Mobile for $721 million stood out as the largest deal in the SaaS market during this period.
Private Equity (PE) Landscape and Funding Trends
In the private equity segment, there was a marginal decline in technology deals, with 67 transactions amounting to $564 million. This reflected a 14% decrease in volumes and a 37% decline in deal values compared to the second quarter of 2023.
Noteworthy funding activities included Nazara Technologies securing $62.2 million from SBI mutual fund schemes in the technology startup segment, and Perfios receiving a substantial $229 million investment from Kedaara Capital, marking one of the largest B2B SaaS deals of the year. Additionally, the IT sector witnessed three IPOs collectively valued at $253 million during the period, signaling continued investor interest in tech-focused public offerings.
Ben Müller
