Data Management Venture Funding Rolls on with $1.3B while M&A Plays Small Ball

Missing a multi-billion blockbuster deal, total consideration plummeted to under $1B while the deal count of 28 remains roughly even with past years.  While 2017 was a year marked by private equity buyers jumping in with both feet, 2018 sees the return of strategic buyers rolling up smaller players.  The 2018 median deal size declined to $50M but the median price to revenue multiple jumped up to 5.2X and for technology focused transaction, that multiple went up to 6.0X.  M&A slowed in the second half of 2018 with just 9 announced deals.  For 2019, we see a healthy M&A market that is likely to top the 28 deals in 2018 with total consideration moving well north of $1B.  The public markets are shaky and there are economic concerns both within the U.S. and internationally.  However, we do not see the pace of innovation slowing in data management and actually see more market disruption coming in 2019.  We also see discreet data management solutions merging together which will cause “one trick pony” start-ups to consider M&A sooner than later.  The larger incumbents are fully aware of the increased pace of innovation and in many instances, will simply buy vs. build in 2019.  For the full report please contact John Rotchford, Managing Director, at john@sasillc.com.