Technology Dealtracker: Q2 2024

The Indian technology sector is witnessing a promising revival, indicating a broader recovery in the M&A industry trends. With substantial IT spending anticipated for 2024, driven largely by advancements in Generative AI, CIOs are focusing on enhancing customer experience and boosting operational efficiency. Despite fluctuations in deal volumes and values, the market shows resilience, particularly in domestic consolidations and private equity activities. Investors remain cautious but optimistic, favoring sustainable development over aggressive expansion until global political climates stabilise.

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Key insights from the Technology Dealtracker Q2 2024

• PE activity fuels deal growth: Q2 2024 witnessed 75 deals valued at USD 483 million, representing a 9% increase in volumes, while a 29% decrease in values. PE activity witnessed a q-o-q increase in volumes since Q3 2023, reaching the highest volumes in the last two years and recording 57 deals worth USD 445 million. It was largely driven by smaller disclosed deals, each valued at less than USD 7 million, which made up 70% of the total PE deals for the quarter.
• CIOs explore Generative AI opportunities: New opportunities for growth and innovation are primarily being driven by Generative AI. Though the revenue generated from Generative AI is going to be limited in the short run, CIOs are continuing to prioritise growth, customer experience, and operational efficiency and are currently planning and evaluating Generative AI solutions.
• Investor focus shifts: There are early shoots of revival in deal activity across the globe. However, the investors are continuing to exercise caution and are favouring profitable startups with strong cash management over the ones opting for aggressive growth strategies.