If you’re in the technology space, you know the pandemic accelerated the sector in game-changing ways. Consumer attitudes and expectations have completely transformed in Canada and beyond — particularly around the digital home.
In terms of deal activity, 2021 saw some of the busiest quarters in recent memory. Strategic groups have recognized that acquiring the right tech capabilities can speed up their own digital transformation and improve their ability to serve customers. At the same time, financial investors have increased their exposure to the tech sector given the dramatic pace of digitization across industries. Many financial investors — including family offices — who’ve typically shied away from the tech sector now see the broad-based impact of technology businesses and have become active investors in the sector. All this change is happening as non-tech companies continue to acquire tech businesses to bolster their digital posture.
As public market valuations continue to rise, we expect companies to look at several avenues to bolster growth. Acquiring a new capability creates opportunities to cross-sell solutions into a target’s user base and vice versa. In addition to growth, acquirers are also keen to empower internal teams to work or learn remotely and enable customers to enjoy a seamless, omnichannel experience.
What does that mean for founders in Canada considering a sale of their business? Your tech company may very well be more attractive to a diverse group of buyers — across tech, non-tech and financial buyer groups — who are increasingly interested in the sector. For the right buyer, your business may represent their next market differentiator or greater resilience. You need to navigate this environment strategically to make the very most of the opportunities taking shape.