In 2021, M&A and investments in the technology sector are breaking records both in terms of volume and valuations. Technology is dominating the M&A league tables. With the increasing importance of technology M&A, the nature of M&A deals is changing as well. It requires business leaders to rethink their M&A playbooks, focused on growth acceleration, business transformation and optionality.

In this article, I have summarised five trends that I believe will drive technology M&A and investments in the next decade. More importantly these trends will shape the unprecedented transformation of our society when it comes to food, health, energy and mobility. My take ..

  1. The impact of technology on amongst others the future of food, health, energy and mobility drives M&A conversations. The discussion will be around portfolio management and how to lean-in in new ecosystems through M&A and investments. Expect to see an acceleration of disruptive M&A deals and venture activity.
  2. We will see a shift from scale-ups to super-scalers. Mega-rounds will provide super scalers the opportunity to become category players. Super scalers are no longer looking for exit opportunities. Instead these companies will start to become the consolidators themselves.
  3. Backed by growth capital investors early stage software companies turn into buy & build platform companies to consolidate legacy players in old industries. The acquired business operations will transfer to the platform. This way buy & build platforms generate profitable growth that comes with a multiple arbitrage opportunity.
  4. Private equity is rapidly making its inroads into technology. Private equity investment managers are getting more comfortable with investments in emerging growth companies and valuation multiples based on SaaS metrics and unit economics.  
  1. A next round of consolidation is taking place amongst IT managed services companies, Software (as a Service) vendors and digital marketing platforms. These sectors are key to develop our digital infrastructure. After a first wave of national consolidation plays, private equity firms are looking to scale these platforms even further internationally. Scale is needed to support clients in their digital transformation, to future proof their business models and last but not least to realise sustainability objectives.