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  "documentTitle": "ey ivca monthly pe vc roundup february 2023",
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      "text": "The year 2022 proved to be a year of paradoxes for the technology services (IT Services, BPM, and ER&D) deal market.",
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      "text": "The year 2022 proved to be a year of paradoxes for the technology services (IT Services, BPM, and ER&D) deal market. After eight consecutive quarters of hypergrowth in deal activity, signs of an impending slowdown began to emerge near the end of 2022 and continued to the first quarter of 2023. EY's analysis of deal activity in 2022 as compared to 2021 and 2020 provides valuable insights into buyer strategies, key acquisition themes, and public and private market valuation trends. The report also covers analysis by subsegment within IT Services, ER&D and BPM.",
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      "text": "We observe that the demand for technology service vendors to differentiate their solutions for digital transformation is more acute than before. Technology services vendors are prioritizing investments (organic and inorganic) in technological hotspots that are recession-resistant, such as cybersecurity, data and AI, automation, etc. in order to establish and sustain their competitive edge. This necessity will probably stimulate deal activity with a higher bar on quality of the asset.",
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      "text": "Technology continues to evolve rapidly and as organizations strive to stay competitive in the digital landscape, acquisitions will play a pivotal role in driving innovation and expanding services portfolio for IT services companies. In the current uncertain economic outlook, there is high focus on quality assets for capability tuck-ins compared to scaled acquisitions. As investments in the software segment have dried up significantly with software companies grappling with growth challenges and lofty valuations, we are witnessing increased interest in IT services from software focused PE/VCs. The reason for increased interest is based on the track record of IT Services companies outperforming the market during economic downturn, secure long term growth prospects and reasonable entry valuations. We envisage increase in deal volumes in growth equity investments in the IT services space over the next 12 to 18 months.",
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      "text": "The last 24 months have witnessed a significant shift in enterprise investments towards digital and business transformation. Technologies such as AR, VR, IoT, and edge intelligence, are now finding applications in manufacturing, automotive, and supply chain. In FY2023, this transformation accelerated with an urgent need to revisit the business strategy and transform existing models to unlock value from emerging opportunities. As a result, firms have focused on capability building through M&As, partnerships and more importantly relook at their business strategies. The growth areas of technology segments will continue to focus on digital CX, digitization, cloudification & digital components that are increasingly being built into all deals, partnerships, and M&As.",
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      "text": "We observe that the demand for technology service vendors to differentiate their solutions for digital transformation is more acute than before. - Shivani Nagpaul, Technology M&A Leader, EY LLP India",
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