Each quarter we aim to keep you up to date with a concise review of M&A and fundraising activity in the Technology Sector in the GSA region, together with a look at capital market developments, valuation levels and a deep dive into relevant sector issues with insights from our KPMG experts.
In this issue:
- Mergers & Acquisitions: Following a strong rebound in 1Q21, deal activity in 1H21 reached a new high, fueled by continuing low interest rates and soaring digitalization demand across businesses. With 90 deals in 2Q21, Germany continued to remain the most active market with an increase in deal count of 8% q-o-q. This rise was partly attributed to the increased merger control thresholds introduced by the German government in January 2021.
- Fundraising: Continuing the momentum of 1Q21, fundraising activity continues to accelerate in 2Q21 witnessing a 10% growth (q-o-q) in deal count. Additionally, the VC deal value of 2Q21 reached a new record, driven by the rise of several new unicorns. 1H21 saw a y-o-y increase of 109% in later stage VC investments, supported by both local and overseas investors.
- Capital markets: Fluctuation in European stock prices in Q2 was mainly caused by an overall economic slowdown in the Euro zone as well as Brexit related uncertainties causing an adverse GDP effect and a decline in foreign (including EU) investment in the UK. Nevertheless, the STOXX Europe 600 closed out the first half of 2021 with a more than 13% increase, remaining consistent on its path to recovery from the COVID-19 pandemic.
- KPMG Insights: The rise of the SPAC was one of the most interesting phenomena in 2020 and 1Q21 in the US fundraising arena. A subsequent cooling off in the US shifted focus towards European SPACs due to the rise in unicorn tech startups across the continent, coupled with European PE investors taking a shine to SPACs due to growing receptivity of the regulatory environment. The KPMG report “SPAC insights” provides insights on the main reasons for choosing SPACs over IPOs, stating the pros and cons of going public with a SPAC, as well as a SPAC outlook for 2021.
The KPMG Technology Deal Flash is published quarterly and highlights current M&A and financing activities in the technology sector in the GSA region. You can subscribe to the newsletter so you won't miss the most recent issue.