Reports: A Comprehensive Insight into our Sectors

Artificial intelligence has shaken off its experimental mantra and fully launched into the developmental phase of the innovation cycle. The growth of many industries is now dependent on the advancements of AI and their application. Industries are hungry for an artificial intelligence that can propel their next technology push, improve efficiency and productivity.

Since the last edition of Hampleton’s AR/VR report, the industry has kept making significant strides, with increasing amounts of funding flowing to later-stage companies in particular to accelerate the development of AR/VR technology in a wide variety of applications, ranging from retail to industrial manufacturing and from healthcare to energy and power.

At first glance, the stable autotech deal volumes recorded over the past couple of years tell a benign story. However, these unexceptional numbers conceal a seismic shift in the makeup of investors and buyers in the race to own the vehicle of the future, with some tech giants and corporates more active than Tier 1s and OEMs.

Global digitization, new regulation, high profile incidents and new technologies drive cybersecurity M&A to record highs. Cybersecurity M&A volume has already reached the full year levels from 2016 and 2017 with 141 completed transactions year-to-date (October 2018).

Understanding customer preferences and targeting them accordingly is now more crucial than ever. With “traditional” digital tools such as banners and email becoming more challenging, marketers are turning to increasingly sophisticated CRM and customer analytics tools that can navigate new landscapes like chatbots and messenger apps. 

During the first half of the year, the highly anticipated $1.4b IPO of social discovery platform Pinterest, put later-stage e-commerce firms in the spotlight. In addition to Pinterest, we have even seen the IPOs of American social media-oriented fashion retailer Revolve and Nigeria-based online marketplace Jumia, rank in the top 10 most successful VC exits so far this year. 

The ongoing rise of software innovation continues to deliver new companies, business models and jobs. The unwavering rise of cloud-based applications is a fundamental component of today’s enterprise software landscape. New players are fast-moving in on the space to push the boundaries of what used to be impossible.

The fintech industry has already broken the records set in 2018, with 1H 2019 witnessing the three largest fintech M&A transactions on record. These mammoth transactions are the sign of a revitalised M&A market following a slump in 2H 2018. 

2018 witnessed the highest level of venture capital investment on record, both in volume and value terms. This included an unprecedented increase in the amount of supergiant rounds and new unicorn births in addition to growth in all median sizes of funding rounds. The total value of all unicorns has also inched above $1 trillion according to CBInsights.

1H 2019 delivered a modest increase in healthtech deal activity compared to 2H 2018, but with an unprecedented leap in average multiples across the board to levels not seen previously. More than ever, M&A activity in the healthtech sector has been driven by the need to deliver better and cheaper healthcare provision against the backdrop of an ageing population, lifestyle diseases, rising costs and increased patient expectations and data protection demands.

There has been a plethora of new entrants attacking individual segments of the HR industry, which means incumbents will have to defend their positions, through innovation or acquisition, in an increasingly competitive space. As we are currently witnessing, an era of inevitable HR tech consolidation has already taken hold.

Over the past three years, solution providers in the industry have seen emerging technologies penetrate the insurance mainstream. These new technologies offer solutions to underserved markets, enhance business models, or create new markets altogether.

The first half of 2019 saw total disclosed deal value in the IT & Business Services market reach a whopping $97 billion - the highest total on record for a six-month period. The overall median disclosed deal amount also increased to $43 million from $23 million in 2H 2018. And, although deal volume lessened, trailing 30-month median revenue and EBITDA multiples remained within the high end of their respective range, signalling steady growth over the past six and a half years. 

High levels of investor confidence, a constant stream of innovation, reflectively cheap capital, rapidly developing supporting technologies and a strong push to create earnings growth through acquisitions are seemingly the right conditions for the M&A market to boom. However, overall trends have shown a correction from 2015's peak volumes and total deal values to a low in 2017 and finally a slight rebound in 2018.