The technology giants and large Indian ‘Unicorns’ are likely to continue acquiring Indian Technology product startups to fill technology gaps as well as talent requirements, says the 2015 India technology Product M&A Industry Monitor Report report from Microsoft Ventures, iSPIRT & Signal Hill.
190 Product M&A with domestic transactions of $2.3B
The report indicates that 190 Technology Product Mergers & Acquisitions pooling in a total deal value of $2.27B have been completed in India from 2011-15 YTD, in which domestic transactions accounts a majority of 72%.
However, due to a higher average deal size, 53 inbound M&A transactions account for about 50% ($21.1M vs $8.4M) of the estimated transaction value.
The average deal size in the country is reported much lower than countries like Israel and US. The average deal size in startup sector India is $11.3M whereas it is $113M in Israel and $57M in US.
Also, the investments in the e-commerce and consumer internet markets have grown 38x from 2010-2014. With 61 M&A transactions, a sum of $4.2B was invested in 2014 alone.
The volume of M&A in mobile has increased from 9% in 2010 – Q1 2014 to 14% in 2011 – Q1 2015 period
300M+ internet users & 15-20M users transacting online
The report indicates that in India there are at present 300M+ internet users (2nd Highest in the world, though we don’t agree with these numbers) and 15-20M users transacting online.
VC/PE investments in the e-commerce and consumer internet markets have grown 38x from 2010-2014.
The investments in E-Commerce/Consumer Internet space saw 101 deals totaling to $4.2B in 2014.
Consolidation in E-Commerce/Consumer Internet is picking up: >90% of deal volume and deal value during the 2014-Q115.
The hedge funds & private equity funds are investing in ‘new’ Series B ($10-25mn) and Series C & D ($20-250m) onwards, fueling a frenzy in valuations.
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