E-commerce marketplace M&A hits $61bn

A record 794 mergers and acquisitions (M&A) involving e-commerce software, platforms and marketplaces were closed in the first half of 2020.

Data gathered by technology M&A advisors Hampleton Partners showed that after reaching peak transaction volumes in 2016, the sector saw renewed impetus in the first half of 2020 as the COVID-19 drove rapid adoption of online shopping.

The overall digital commerce sector saw an uptick in disclosed transaction value, which reached $61 billion, with the median disclosed transaction value over the past 30 months standing at $20 million.

The most significant increase in deal volume was within the internet services and platform solutions segment, with a record 370 deals, accounting for 47 per cent of the total volume of digital commerce transactions in the first half of 2020.

The largest deal in this segment was the planned Morgan Stanley acquisition of discount brokerage and online trading platform E-Trade for $13 billion. Other platform deals included payment platforms, with Visa’s acquisition of Plaid for $5.3 billion.

Ralph Hübner, sector principal at Hampleton Partners, said: “The Coronavirus outbreak is a once-in-a-lifetime catalyst driving digital transformation.

"This pandemic-generated shift to online will continue, as all players - including the less traditionally ‘digital’ ones like governments or schools - continue to invest in digital alternatives."

He added: “Where brands and retailers do not have the time to build their digital capabilities from scratch, or simply catch up with the accelerated digital economy, they will continue to buy time and consumer access through M&A.”

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