Record Number Of Deals Target Platforms, Marketplaces & E-Commerce Software As COVID-19 Drives Business Online
London, UK – 16 September 2020. The Digital Commerce M&A market report from Hampleton Partners, the international technology mergers and acquisitions advisor, reveals that after reaching peak transaction volumes in 2016, the sector saw renewed impetus in the first half of 2020 with 794 deals.
The overall digital commerce sector saw an uptick in disclosed transaction value which reached a healthy $61 billion, with the median disclosed transaction value over the past 30 months at $20 million.
The most significant increase in deal volume was within the Internet Services & Platform Solutions* segment, with a record 370 deals, accounting for 47 per cent of the total volume of digital commerce transactions in the first half of 2020.
The largest deal in this segment was the planned Morgan Stanley acquisition of discount brokerage and online trading platform E-Trade for $13 billion, which gives Morgan Stanley access to new sources of revenues and an additional 5.2 million customer accounts and $360 billion in assets.
In the same segment, edtech platforms are growing very rapidly. At the WHO’s announcement of the pandemic, education app downloads worldwide surged 90 per cent compared to the weekly average in Q4 2019. A few months later, Chegg, which specialises in textbook rental and tutoring, acquired Mathway, a highly-rated maths education app for $100 million.
Other platforms to benefit included payment platforms, with Visa’s acquisition of Plaid for $5.3 billion.
Impact of coronavirus pandemic on digital commerce M&A
Ralph Hübner, Sector Principal, Hampleton Partners, said:
“The 2020 coronavirus outbreak is a once-in-a-lifetime catalyst driving digital transformation. This pandemic-generated shift to online will continue, as all players – including the less traditionally ‘digital’ ones like governments or schools – continue to invest in digital alternatives. In addition, many e-commerce and direct-to-consumer brands are benefitting from unprecedented levels of business.
“Where brands and retailers do not have the time to build their digital capabilities from scratch, or simply catch up with the accelerated digital economy, they will continue to buy time and consumer access through M&A.
“Key trends such as social media commerce, marketplace business and mobile commerce will continue to gain momentum and we anticipate that digital commerce targets which promise a bright future will be the target of growth investors – whether private equity or venture capital firms – as well as strategic buyers, as all buyers grapple with fewer investment alternatives more generally. This will keep digital commerce multiples high.”
Hampleton’s Digital Commerce M&A report analyses transactions, trends and activity across the following segments: Internet Services & Platform Solutions; Online Retail; Media, Social & Gaming, Agencies & Service Providers; and Digital Commerce Software.
Download the full Hampleton Partners’ Digital Commerce M&A Market Report 2H2020: https://www.hampletonpartners.com/reports/digital-commerce-report/.
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Note to editors:
*The “Internet Services & Platform Solutions” subsector covers digital commerce services, online advertising, directories, search platforms, education services, exchanges, reference providers, analysis tools, market data platforms and information services.
Hampleton Partners’ M&A Market Reports are compiled using data and information from the 451 Research database (www.451research.com) and from S&P CapitalIQ.
About Hampleton Partners
Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.
With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Artificial Intelligence, Autotech, Cybersecurity, Digital Commerce, Enterprise Software, Fintech, Healthtech, HR Tech, Insurtech and IT & Business Services.
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