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.
1. India Technology M&A
Activity Review 2013
May 2013
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2. 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/iSPIRT
All Rights Reserved
3. 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 Mn
Acquired stake in
for $ 100 Mn
Source: Zinnov Analysis
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All Rights Reserved
4. 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 Analysis
Copyright (c) Zinnov/iSPIRT
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5. C
An evolving ecosystem of VCs/ Accelerators/ Incubators is
further supporting the growth
No. of technology
incubators
10x
120+
No. of angel
networks >20
No. of jobs created 25x
400,000+
~ 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/iSPIRT
All Rights Reserved
6. 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 Social
Source: VCC edge, Zinnov Analysis
Copyright (c) Zinnov/iSPIRT
All Rights Reserved
7. 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 Analysis
Copyright (c) Zinnov/iSPIRT
All Rights Reserved
10. 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
2009
44 Deals
2 Deals 26 Deals 12 Deals 4 Deals
10%
46%
20%
22%
2%
4 Deals 28 Deals 11 Deals 12 Deals 1 Deal2012
56 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 in
for $ 202 Mn
Acquired 100% stake in
for $ 176 Mn
Source: Zinnov Analysis
Copyright (c) Zinnov/iSPIRT
All Rights Reserved
11. 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
22
10
12
38
22
16
33
19
14
19
13
6
17
15
2
Chennai
Total Deals
Domestic
Inbound 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 Analysis
Copyright (c) Zinnov/iSPIRT
All Rights Reserved
12. Thank You
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