Mergers & Acquisitions (M&As) in the Software & IT space in Southeast Asia inched up in 2023 as digital transformation of businesses in the post-pandemic era has created high demand for web development, cloud computing and ICT infrastructure.
The Software & IT sector witnessed 14 M&A deals in 2023, next only to fintech in terms of tech M&A deal volume. In comparison, there were 12 M&A deals in the space in 2022, and 10 deals in the previous year, according to the SE Asia Tech M&A Review 2024 report by DealStreetAsia DATA VANTAGE.
The growth in the Software & IT sector came despite overall tech M&A activity in SE Asia plummeting by over a third in 2023 as global economic challenges prompted investors to hold off on expansion plans.
Software & IT M&A deal volume in SE Asia
Within Software & IT, cloud computing has been the most popular sub-category.
Between January 2019 and May 2024, there were 14 cloud computing M&A deals in Southeast Asia, followed by web development (12 deals) and ICT infrastructure (10 deals). These three sub-categories together accounted for 59% of the M&A deal volume in Software & IT during this period.
Deal volume of different categories in Software & IT since 2019
Baring Private Equity Asia’s $1 billion acquisition of Singapore-based Straive was the biggest Software & IT M&A deal since January 2019. The next biggest deal—Singapore-based DigitalEdge DC’s acquisition of Indonesia’s Indonet—was worth $165 million.
Top ten Software & IT acquisitions since 2019
| Target Company | Category | Acquirer | Value |
|---|---|---|---|
| Straive | End-to-end solutions | Baring Private Equity Asia | $1B |
| Indonet | ICT Infrastructure | Digital Edge DC | $165m |
| Measurable Data Token | Web development | Chain | $100m |
| Strateq Group | End-to-end solutions | StarHub | $59m |
| Sandz Soutions | ICT Infrastructure | KronologiAsia | $18m |
| Extend It Resource | End-to-end solutions | Beryl8 | $18m |
| Wilstech | IT consulting | Systech Berhad | $16m |
| AVM Cloud | Cloud Computing | TIME dotCom | $15m |
| Yondu | End-to-end solutions | Globe Telecom | $10m |
| Transnational E-Business Solutions Inc. | End-to-end solutions | EasyCall Communications Philippines | $3m |
Source : DealStreetAsia DATA VANTAGE
Funding for Software & IT fell in 2023
Ironically, private capital investors have not been as keen on Software & IT as acquirers.
Investments into Software & IT startups in Southeast Asia fell 40% to $228 million in 2023 from $378 million in the previous year, according to the SE Asia Deal Review: Q1 2024 report. Deal volume, too, dipped a tad to 48 last year, compared with 50 in 2022.
However, funding into the sector picked up in the first quarter of 2024 as it raked in $99 million, up from $65 million in the previous quarter and $38 million in Q1 2023. Deal volume doubled to 24 in Q1 2024 from 12 in the previous quarter and 11 a year ago.
Equity funding value and volume in Software & IT
Marketing tech M&A deals tripled in 2023
Marketing tech was another sector that witnessed a surge in M&A activity in 2023. Deal volume tripled to 12 after a steep fall in the previous year. This made it the third most active sector for M&As in Southeast Asia last year.
Marketing tech M&A deal volume in SE Asia
Within marketing tech, consulting/agency was the top category with 12 deals between January 2019 and May 2024. It was followed by CRM with eight deals. These top two categories accounted for around 61% of the total marketing tech M&A deals during the period.
Deal volume of different categories in marketing tech (2019-5M2024)
Notably, none of the marketing tech M&A deals in 2023 disclosed their acquisition values.
All marketing tech acquisitions in 2023
| Target Company | Category | Target HQ | Acquirer |
|---|---|---|---|
| inTouch | Points and rewards | Indonesia | Giift |
| Ascentis | CRM | Singapore | Fushi Technology |
| Aquient | CRM | Singapore | K2 Partnering Solutions |
| CardsPal | Points and rewards | Singapore | Utu |
| DASS | Consulting/agency | Singapore | ADM Promotions |
| Canalys | Market research | Singapore | Informa Tech |
| Pandan Social | Consulting/agency | Malaysia | Ruder Finn |
| Affable | Influencer Platform | Singapore | Bazaarvoice |
| Ovation Solutions | UGC | Singapore | Atula Technologies |
| Rabbit's Tale | Consulting/agency | Thailand | Accenture |
| iFoundries | Consulting/agency | Singapore | Atypical Global |
| Jixie | Consulting/agency | Singapore | Accenture |
Source : DealStreetAsia DATA VANTAGE
The surge in M&A deals in emerging sectors like Software & IT and marketing tech comes at a time when fintech and e-commerce, which were popular during the pandemic, have witnessed a drop in M&A deals in 2023.
