ispirt: m&a activity report may 2013
Post on 17-Oct-2014
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M&A opportunities for Indian product startups. Indian product companies punch below their weight. Despite huge innovation and rising entrepreneurship, most Indian product companies are invisible on the global map. The reasons are many, but a big one is the lack of meaningful exits for companies that actually create value in their product markets. This paper focuses on a plan to address this gap.TRANSCRIPT
India Technology M&A Activity Review 2013
May 2013
This report is solely for the use of Zinnov and Ispirt Client/Personnel. No Part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov and Ispirt
Supported by Knowledge Partner
Key Trends
Cross border Tech M&A activity is witnessing increased momentum
Start-up ecosystem is rapidly growing to position India as a hub of technology innovation
An evolving ecosystem of VCs/ Accelerators/ Incubators is further supporting the growth
A
B
C
Key trends in Indian Technology M&A landscape..
Source: Zinnov Analysis Copyright (c) Zinnov/iSPIRTAll Rights Reserved
A
Cross border Tech M&A activity is witnessing increased momentum
44
56
36% Outbound
16% 48%
Inbound Domestic
15% Outbound
46% 39%
Inbound Domestic
Note: 1USA not considered in the list
• At an average of US$ 37 Mn, India is witnessing 30 times increase in median deal size since 2009
Total Tech M&A Deals
2009
2012
Key Inbound M&A Deals Over The Years
Acquired stake in
for $ 75 MnAcquired stake in
for $ 100 Mn
Source: Zinnov AnalysisCopyright (c) Zinnov/iSPIRT
All Rights Reserved
Total Number Of Start-ups1 (2012)
Start-up ecosystem is rapidly growing to position India as a hub of technology innovation
B
Note: 1According Angel List
25,883
USA
1,646
Canada
2,128
U.K.
600
Germany
1,326
India
492
Israel
231
China
152
Japan
Number Of Start-ups growing in India at a
CAGR ~15%
Famous Indian Start-ups have been nurtured by MNC Talent
• Founded by ex Amazon employees
• Founded by ex IBM, TI and Honeywell employees
• Founded by ex Yahoo employee
R&D Talent Pool Across 1,033 MNCs in India = ~235,000
Region % Start-ups % MNC R&D Centres
% MNC R&D Talent
Bangalore 27 % 40 % 53 %
Mumbai Region 22 % 21 % 17 %
Delhi NCR 24 % 16 % 10 %
Hyderabad Region 13 % 11 % 13 %
Source: Zinnov AnalysisCopyright (c) Zinnov/iSPIRT
All Rights Reserved
C
An evolving ecosystem of VCs/ Accelerators/ Incubators is further supporting the growth
No. of technology incubators
10x120+
No. of angel networks >20
No. of jobs created
25x400,000+~ 20 Incubators/
Accelerators added in 2012 alone
~ $25 Mn early stage annual funding
provided to start-ups in 2012
VC Funding has grown 2X between 2009 and 2011 to reach ~$1.1
Bn
Technology Start-ups funded
annually
60x>250
Source: Zinnov Analysis Copyright (c) Zinnov/iSPIRTAll Rights Reserved
Cloud/ Big Data
Education
Mobile
Social Media
Productivity
E-Commerce
Healthcare
32%
29%
21%
18%
18%
14%
11%
Focus Area Of Indian Start-ups
49% of all tech M&A deals in India in 2012-13 focused on CLAMS1
The drivers are further converging towards a promising Indian tech M&A landscape
Software and Internet now account for 68% of all M&A Tech Deals in India
Note: 1Cloud, Analytics, Mobility and SocialSource: VCC edge, Zinnov Analysis
Copyright (c) Zinnov/iSPIRTAll Rights Reserved
Conclusion
India is likely to emerge as a hub of
technology innovations
India to witness tremendous growth in
number of tech companies of value to
global brands
Ecosystem collaboration & community engagement
required to nurture the growth M&A activity to gain continuous traction
Source: Zinnov AnalysisCopyright (c) Zinnov/iSPIRT
All Rights Reserved
Appendix
Copyright (c) Zinnov/iSPIRTAll Rights Reserved
Note: 1Till 10th May, 2013
Total Tech M&A Deals
2 2 1 4
2637 33 28
11
1212
12 11
2
44 13 12
2
1
1
Hardware Software IT Services Internet Semi Conductor
2009 2010 2011 2012 20131
44 55 59 56 16
Deal Split By M&A Activity
16 15 11 8 8
7 16 16 261
2121 25
22
7
Outbound Inbound Domestic
2009 2010 2011 2012 20131
44 55 59 56 16
Tech M&A Deal Trends
Source: Zinnov AnalysisCopyright (c) Zinnov/iSPIRT
All Rights Reserved
5%
59%
27%
9%
Hardware Software IT Services Internet Semiconductors
Software industry emerging as key category for M&A
Tech M&A Deal Split By Industry
200944 Deals
2 Deals 26 Deals 12 Deals 4 Deals
10%
46%20%
22%
2%
4 Deals 28 Deals 11 Deals 12 Deals 1 Deal201256 Deals
• IT services industry giants like Wipro now
exploring M&A route to enter new
markets/service lines rather than looking to
add topline revenue
Top Software Deals in 2012
Acquired 100% stake infor $ 202 Mn
Acquired 100% stake infor $ 176 Mn
Source: Zinnov AnalysisCopyright (c) Zinnov/iSPIRT
All Rights Reserved
Bangalore, Mumbai and NCR, top Tech M&A destinations
Tech M&A Deal1 Split By Location (2009 -2012)
Note: 1Only Inbound and Domestic M&A Deals considered.
Bangalore
Mumbai Region
Hyderabad
Delhi NCR
221012
382216
331914
19136
17152
Chennai Total DealsDomesticInbound Deals
Top Outbound Deal Destinations (2009-2012)
Location Number of Deals
California 6
Singapore 5
San Francisco 3
London 3
New York 3
Texas 2
Source: Zinnov AnalysisCopyright (c) Zinnov/iSPIRT
All Rights Reserved
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