Digital Services Industry Update Q4’24: M&A and Fundraising increased to over $16+ Billion spurred by continued focus on digital transformation

The Digital Services sector remained active and resilient despite a challenging macro-economic environment in 2024. Our report shows continuous appetite from the Private Equity community for acquisitions of assets with resilient business models led by disruptive technologies and strong management teams.

The 14^th edition of our Digital Services Industry Update provides an overview of mergers and acquisitions and fundraising activity, as well as insights into the present and future trends impacting major areas of investment within the industry, including digital transformation, cloud migration, tech-enabled services, security services and business intelligence & data analytics.

Overall M&A activity in the sector increased in Q4, totaling 390+ & $8.0bn+ disclosed M&A deals, with consistent fundraising transactions at 430+ & $8.5bn+ disclosed fundraises*, including:

• Atlantic acquired BrainSell for an undisclosed amount
• EPAM Systems acquired First Derivative for $293m
• G42 acquired CPX for an undisclosed amount
• Sia Partners raised $263m of development capital from Blackstone
• SDG raised an undisclosed amount of development capital from Recognize Partners
• VFS Global raised $950m of development capital from Temasek Holdings

Going forward, our Digital Services team anticipates increased momentum in M&A and fundraising activity from Strategics and Private Equity, as businesses continue to prioritize Digital Transformation initiatives to enhance margins and strengthen the resilience of their operating models. We expect an uptick in investment into adjacent technologies that will drive further efficiencies, scalability and market differentiation such AI, automation and IoT.

*Source: Pitchbook 

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