At Hampleton, we believe that research is more than just raw deal data.

Developments in Artificial Intelligence (AI) are arguably the most fascinating of software innovations to emerge in recent years. This new wave has attracted increased consumer curiosity, and a number of industry experts have professed that adapting to the world of AI will be pre-condition for survival in the technology industry.

Science fiction is becoming fact as Augmented and Virtual Reality (AR/VR) enters our daily lives. The arrival and disappearance of 3D television was a false dawn, but signalled the beginning of a new era that is resulting in consumers and businesses around the world engaging with AR and VR in combination with smart devices.

At a glance, 2018 showed activity in virtually every functional arm of the future car, from connectivity hardware to mobile parking and mobility apps. The broader automotive industry also experienced shocks that partially upended a few previously accepted truths about the sector. 

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).

The digital marketing industry is shaping up with more turns and more tech. The rise of chatbots and AI analytics is nudging retailers to invest and acquire more in the realm of personalised touches and deeper insights, while a shift from pre-sales to post-sales marketing is closing the loop in the customer journey life-cycle.

With more sales concluded online year-over-year – in verticals as specific as automotive and pharmaceutical retail – e-commerce is transforming the way consumers and businesses buy goods but also what buyers expect as a customer experience out of transactions.

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.

Whilst fintech has rippled across the financial services industry and revolutionising the processes and business models, there have been significant regional disparities. The UK leads the way in Europe, breeding a new generation of innovators with record level of investments in 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.

In the healthtech sector, numerous technologies were targeted by acquirers in 2018: blockchain, data storage, artificial intelligence and patient information management software all garnered keen interest, as did health-specific IT services and medical hardware. Meanwhile, in the age of ultra-connectedness at home or on-the-go, patient-oriented self-service technology continued to strike a note with acquirers.

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.

Industry 4.0 has become an integral part of business for key technology giants: Bosch Rexroth, Festo, PTC and Siemens, to name a few, are all turning yesterday’s promise of connected and intelligent manufacturing technologies into today’s reality.

The proliferation of mobile devices, new technologies and enormous funding has spawned an army of start-ups impacting the world stage of insurance software vendors. Existing insurance software vendors need to adapt and adopt these new technologies, including AI, blockchain data, IoT, predictive analysis, as well as serving new business models such as micro-insurance, mobility-as-a-service, usage-based insurance and more.

The IT & Business Services sector remains continuously pertinent, encompassing services ranging from telecommunications, systems integration, and accounting IT services; to web design, digital marketing or security IT services. As technology such as big data analytics, cloud computing and internet of things continues to infiltrate these areas, a wave of consolidation is being driven by companies seeking to stay ahead of the curve by ensuring their connectedness and relevance. 

Automation is increasingly paving the way for the next wave of enterprise application deployments. With artificial intelligence and cloud-hosted voice assistants such as Siri, Cortana, Google Assistant, and Alexa storming the consumer market, legacy vendors and new entrants alike are racing to deliver better efficiency, costs and speed in a new age of computing.

(Please note that this report is only available in German)

After a record year in 2017 with about 194 transactions, it is surprising that M&A activities developed much more restrained in 2018. At the same time, the recent transaction volume stabilisation indicates an imminent upward movement as several areas of the technology industry are approaching a wave of consolidation. 

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 during the first half of 2018. This correction and rebound is indicative of M&A’s cyclical nature, however a strong 2H2018 may be an early warning-sign of investor sentiment being overly optimistic.