Technology

In the era of digitalisation, the German technology sector is particularly significant. The sector not only represents an important branch of the economy with more than EUR 230 b in annual turnover, one million jobs and almost 7% of total economic output. In the context of digitalisation, the sector is above all a central driver of innovation that has a significant impact on other sectors.

LAST UPDATE

01/10/2021

TYPE

Executive Summary

CONTRIBUTORS

Dr. Nicholas Hanser

Current Developments

The software segment as the industry's driving force

The German technology sector finds itself in an ambivalent market environment. The segments of the technology sector are increasingly developing in different directions. While software and services are fundamental growth drivers for the entire sector, sales in the hardware segment are increasingly stagnating.

Growth Rates

2020

-1.3%

2021

+2.0%

2022

+1.8%

Trends

Analytics and Artificial Intelligence

The interplay of connectivity and new network infrastructures is generating huge, additional volumes of data. Analytics and AI help to use the data effectively.

Transactions

Our Sector Transactions

0

Highlight Transaction

Habyt GmbH x Homefully GmbH

Number of M&A transactions - DACH region, 2021 (as of August)

387

Significant Transactions

SAP SE X Signavio GmbH (2021)

AppLovin Corporation X adjust GmbH (2021)

Future Trends

The Internet of Things and the introduction of the mobile infrastructure 5G enable forward-looking business models such as autonomous driving, telemedicine and the control of networked machines. As early as 2020, around 750 m network-enabled devices will be in operation in Germany. In addition, XaaS (as-a-service) business models are a rapidly growing field. Cloud-based models open up new sources of revenue while reducing costs.

Our View

The technology sector in Germany plays an immensely important role, especially in terms of its innovative strength. Many other industries benefit from the technological achievements and business models that emerge from the sector. The software segment in particular has huge growth potential. But the high-margin special hardware segment also has extremely attractive prospects. The German technology sector is an important success factor for overall economic development.

People & Voices

Saxenhammer has in-depth technical and industry knowledge and can draw on a broad network of industry experts with many years of transaction experience.

"We strongly observe that established companies are increasingly buying up small technology start-ups, as they fear missing out on the latest technology trends. Accordingly, many acquisitions in the market are taking place for strategic reasons, which also accounts for the high valuations."

Nicholas Hanser

Partner | Head of Technology

Sector Update

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